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Indian electorate prefers stable gov’t to carry on reforms: central bank chief

Rajnish Kumar, chairman of the State bank of India, is in Nadi, the third-largest conurbation in Fiji, to attend the Asian Development Bank’s 52nd annual meeting scheduled for May 1-5.

The first of seven phases of voting took place on April 11, and will continue until May 19. Vote counting is scheduled for May 23, with the results being declared on the same day.

The election will pit the two leading candidates against each other – incumbent Prime Minister Narendra Modi and his Bharatiya Janata Party, and Rahul Gandhi and the Indian National Congress.

It will be a marathon voting process, with over 800 million Indians heading to the polls to fill 543 seats for the Lok Sabha, the lower house of the Indian parliament.

“Very difficult to predict, we will know that for certain on 23 May, but my expectation and my assessment of this situation is the trend in India is the electorate prefers stable government that we’ve seen in many state elections, and what I believe is that the national level also, the preference of the electorate would be for providing a stable income. And if we have a stable government, and the kind of reforms which have happened in the last five years, some of them have not been easy reforms. And when the scale of the reforms is such, there’s always something when these reforms are initiated,” he said.

India’s GDP grew 7.1 percent in 2018 compared to last year. According to the World Bank, the country can expect GDP growth of 7.5 percent for 2019 and 2020.

Yet India’s progress has not been without setbacks. The nation is still recovering from the “twin shocks” of recent major economic reforms: the demonetization of high-value currency in 2016 and the introduction in 2017 of a goods and services tax.

While the economy is being transformed, there are still many social challenges to face from urbanization to education, health, gender discrimination, water scarcity, sanitation and lack of transparency in many government institutions leading to corruption and hampering competitiveness, growth, and development.

Other challenges include a banking sector beset by a humongous bad debt problem that is restraining credit growth and borrowing.

Despite these challenges, the bank governor said in the long run, demands for infrastructure and consumption will be strong enough to drive the country’s economy.

“But in the long run, or I believe that even in the next five years, the impact will be in opposite, the demand in India for the infrastructure as well as consumer demand will continue to be strong, and the growth in economy will come because of these two things,” he said.

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