The S&P Ratings upgrade is a “good omen” for the Indian economy, and there will be a good result coming for the BJP on June 4 which could mean the stock market can really go up and be a solid bulls market, Union Finance Minister Nirmala Sitharaman told CNN-News18 in an interview.
“Undoubtedly, it’s a big good omen (S&P upgrade) for Prime Minister Narendra Modi, for the country, for the economy. The reasons they put out more than clearly explain why an economy needs visionary leadership… a leadership which takes care of inclusion, and at the same time keep fiscal prudence, makes sure that expenditure goes for asset creation and not for revenue expenditure which can sometimes be good but not at that scale,” Sitharaman said on the S&P Global Ratings revising its outlook on India from ‘stable’ to ‘positive’.
She said the PM had focussed on spending more money on infrastructure and ensuring quality expenditure happens. “S&P themselves have said as a justification to why they have changed the grade and also have shown that in 24 months there is every chance of us being given a better grade,” the Finance Minister said.
Stock Market Boom?
Asked whether the stock market will see a boom on June 4 if the BJP wins the general elections, the Finance Minister said a good result is coming for the BJP. “It will indicate stability and that will mean good message for the stock market… and therefore it can really go up… it will be a solid bulls market then,” the Finance Minister said in the interview.
She said that markets work on many different factors, domestic being an important one. “But in a global situation, where there is so much volatility all around the world and big economies actually make up for the biggest market for many many emerging economies to export their products…almost signs of recession sitting in and if they are lucky, they are going to come out of it,” she said.
The Finance Minister said the volatility globally is a very big issue. So if the markets were to look at these factors and then perform, they have the domestic market as a sharp contrast to the uncertainty of what prevails outside. “And therefore certainly, Indian stock markets have a lot to celebrate… and they are showing from last six to eight months… equally, markets have their own wisdom in seeing what is going to make an economy sound stable and predictable in a way given minimum level of uncertainties and also they want government to be stable. They don’t want unstable governments which are normal products of coalition government,” the Finance Minister told News18.
Sitharaman said uncertainty is high probability when there is no single majority government in place. “Indian people have seen in last two elections that giving single majority for Prime Minister Modi… and, as a result a stable government is in place … which gives predictable policy, predictable and consistent tracks, framework… all these matter to the stock market,” Sitharaman said.
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