Ambitious reform agenda at risk

Overview

Global factors have overcome the headwinds of poor macroeconomic numbers and uninspiring political leadership to spark an Indian equity market rally in recent weeks. But market outperformance in H2/11 will require major policy changes to overcome the drag from continuing inflation and, in our view, significant further monetary tightening. The good news is that we expect the government to press ahead with an ambitious legislative and policy agenda. However, the Congress Party’s mixed...