BJP Surge In Bengal: What Do Election Results Mean For Indian Economy? Sunil Singhania Says GDP To Rise 50 Bps

Even as the counting of votes for the five state elections is underway, with the BJP emerging as the leading party in three states (West Bengal, Assam and Puducherry), market experts said the election outcome could boost the country’s gross domestic product (GDP) by 50 basis points (bps).

Counting of votes is underway in West Bengal, Tamil Nadu, Kerala and Assam, along with the Union Territory of Puducherry. Trends suggest that the BJP is leading in West Bengal, Assam and Puducherry.

Speaking at an industry event, Sunil Singhania, founder of Abakkus Asset Manager, said, “Regime change in West Bengal could add 0.5 per cent to our GDP. It can add significant growth to our country and has the potential to be a huge multiplier to our economy.”

A basis

point is a 100th of a percentage point.

He said Bengal used to be the business hub and slowly, because of the government policies, businesses exited the state. “We have seen how a forward-looking government in a large state like UP can transform. West Bengal has potential to become a $1 trillion economy.”

Vikas Khemani, founder of Carnelian Asset Management, said, “When India got Independence, Bengal was known for three things — industry, medical, and education. But in the last 70-75 years, all three things have gone from there.”

He added that the election outcome could unlock the state’s economic potential. “A good government can change the fortune of a state. It will also be good for national security,” he added.

Vijay Chandok, MD and CEO of NSDL, said, “Clearly people are fed up with the current governments. What that means for the markets remains to be seen.”

The Nifty50 and Sensex on Monday opened higher, tracking election results, gains across Asian markets and easing crude oil prices. In the opening trade, the Nifty50 was up 0.7% or 164.65 points at 24,162.20, while the Sensex gained 621.31 points, or 0.81%, to trade at 77,534.81.

Broader markets also saw buying interest, with the Nifty MidCap and Nifty SmallCap indices rising 0.73% and 0.89%, respectively. Among sectors, Nifty Auto, Nifty Realty and Nifty Metal led the gains. On the flip side, Nifty Media, Nifty IT and Nifty Private Bank were the top laggards.

V K Vijayakumar, chief investment strategist at Geojit Investments Ltd, said, “Today’s market action may be unduly influenced by the state election results with focus on West Bengal. But it is important to note that this will be only a very short-term sentimental impact.”