Market eyes "Left out" reforms

ET 18/5/09

MUMBAI: When the Congress led-UPA is all set to march through the Parliament Street, players at Dalal Street heave a sigh of relief on expectations of a stable government at the Centre.

In reaction to UPA’s phenomenal success, equity indices created history after hitting two upper circuits in a single day. Going ahead, market men foresee a hassle-free governance in the next five years with Left no way getting into the national picture with its reduced number of seats. Market participants presume Left parties as a stumbling block towards growth.

The Left faced a drubbing in 2009 general election, down at 24 seats as compared to 63 seats in the previous election. Market watchers see a couple of reasons behind Left’s debacle in 2009 general elections. While opposition to economic reforms/development has painted an unflattering picture against the Left conglomerate, people did not accept Left’s double standard, which emerges between Delhi leadership and state level leaderships (read West Bengal and Kerala).

According to the head of an institutional broking firm, CPM faltered as Buddhadev Bhattacharya, the CM of West Bengal pitched for the same cause in his own state that Prakash Karat exercised his vocal chord against the central government. In many cases like investment wooing, policy making etc. this was evident in the last five years. The ‘nano’ episode is more of a political gimmick that people didn’t accept.

A large of number of traders is very happy about the fact that now Left can no longer upset national policy formations. Demands for dividend taxation, issues relating to long term capital gains now will not be raised, say traders who feel a central government sans Left will add to fast paced economic developments.

“Left parties need to take a lesson from this election. They need to be pragmatic in view of current economic trends, instead of dogmatic. They should learn how to strike a balance between capitalism and socialism just like China,” said Daljeet Singh Kohli, head – PCG research, Emkay Global Financial Services.

“People gave their verdict! Under Left rule, people feel lagged behind other states. A comparison between West Bengal and other states like Gujarat and Maharashtra in terms of growth makes the difference felt,” said Manish Sonthalia, VP- Equity Strategy, Motilal Oswal.

Meanwhile, Montek Singh Aluwalia emerges as the best choice for the post of finance minister among market participants who give priority to knowledge background of a candidate for a ministerial berth.

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