Any prediction of the possible outcome of the ongoing Parliamentary election is becoming increasingly tough in the absence of a visible wave in favour of either the rightist Bharatiya Janata Party-led National Democratic Alliance (NDA) or its principal opposition, a 26-party political combine, Indian National Development Inclusive Alliance (INDIA). The latter is represented by chief ministers of as many as seven states and 142 members of the last Parliament. The falling voter turnout in the first three phases of election, this time, has become a further cause of concern for both the NDA and INDIA. An overall five to six percent voter dropout should seriously impact the number game of either the NDA or INDIA. Publicly, both the groups are aspiring to have a final strength of 300 members each although there are only 543 parliamentary constituencies. To form the next government, a political combine would need to win at least 272 seats. A government will look more stable if its number of Lok Sabha MPs surpasses 300.
As of now, both the NDA and INDIA election campaigners look somewhat rattled by the lackadaisical response of the public. So nervous are the election campaigners that few talk about their poll manifestos and how they wish to serve the people if returned to power. Most of the group leaders don’t have much to communicate with the electorates except for hurling verbal accusations against each other, dishing out lies and more lies, twisting facts and often using barbs or even personal attacks. The election manifestos have practically taken a back seat. Public participation in these election campaigns is becoming frustratingly thin by the day. The continuing heat wave could be a reason. The business and industry, which generally back the potential victors, are confused as well. They are not sure of the side of the bread that needs to be buttered. Big business, industrial houses and trade are believed to be clandestinely offering funds to both sides to keep them in good humour. Prime Minister Narendra Modi, the NDA’s star campaigner, has, for the first time, accused industrialists Ambani and Adani of sending loads of alleged illicit funds to the Congress, claiming that this is why Congress leader Rahul Gandhi has stopped speaking against them.
Ironically, Narendra Modi’s continuous anti-Congress, anti-Gandhi family tirades have provided the Congress party a much needed daily news spot and indirectly helped the public support or bolster independent voter imagination for the Congress, which hopes to acquire 100-plus seats in Lok Sabha. Surprisingly, Modi did not spare Congress party satraps even during his campaign in West Bengal, where the Congress hardly exists. The Congress party could not win even a single seat in the last West Bengal assembly election. Modi’s Congress-phobia is clearly working to the advantage of the country’s grand old national party (GOP). Speaking at an election rally in Odisha’s Kandhamal district, Narendra Modi said “they (Congress) create fear psychosis in the minds of Indians by reiterating Pakistan is a nuclear power. Due to Congress’ weak mindset, the people of Jammu and Kashmir have struggled for decades.” As in West Bengal, the Congress party today has little relevance to Odisha politics. In the 2019 Lok Sabha election, Odisha sent a lone Congress MP from the Koraput (SC) constituency.
It may be noted that for the first time since the end of 2013, foreign portfolio investors (FPIs) are steadily withdrawing from the market on poll jitters. Amid speculation over BJP winning fewer seats in the ongoing national elections than earlier estimated, FPIs are selectively offloading stocks. This is hardly a good sign for the ruling NDA. The BJP-led rightwing political alliance was heavily backed by FPIs and global American multinational investment banks and financial services companies such as Goldman Sachs, JP Morgan, Wells Fargo and Morgan Stanley before the 2014 and 2019 parliamentary elections in India. Goldman Sachs continues to back Modi though less vociferously, this time. However, FPIs seem to be playing safe in the Indian market ahead of the outcome of the country’s parliamentary election on June 4. During the current month alone, FPIs have sold shares worth over Rs.22,000 crore till mid-May, following a pullout of Rs.21,524 crore in April. Consequently, more than 100 stocks with over five percent FPI stake as of March 31, 2024, witnessed declines ranging from 10 percent to 30 percent, compared to a mere 1.7 percent fall in the Nifty index. Indian mutual fund operators have come to the rescue of the market as buyers. The outcome of the parliamentary election will be a key trigger for the market.
FPIs were net buyers during the three previous Lok Sabha elections – especially in the two months leading to the polls and also during the period of election – notwithstanding the uncertainties that accompany any election in a highly populous, multicultural and multilingual democracy such as India. During the process of the 2009 Lok Sabha election, which was happily won by Manmohan Singh-led United Progressive Alliance (UPA), FPIs were net buyers of stocks at Rs. 20,117 crore – a record inflow of foreign investment in the country’s secondary market during national polls. The usual stock market volatility was not much noticed during the previous three parliamentary elections. Are foreign investors sensing a different political smell this time concerning the stability of the country’s national government and the market? Wealthy Indians are buying gold like never before to protect their cash holdings. Official records show that gold imports, last month, trebled to $3.1 billion from $1 billion during the same period a year ago. Gold prices are shooting up almost every week. The political situation at this moment is as volatile as the stock market though a good number of people still feel that the NDA may return to power with a comparatively thin majority. The prolonged seven-phase election is causing tension and agony for all. (IPA Service)
The post Large FPI Pullout, Gold Import Surge Portend Political Power Change At The Centre first appeared on Latest India news, analysis and reports on IPA Newspack.
