New Delhi. Lack of political stability in a coalition government and the need to build consensus may slow down the decision-making process. Moody’s Analytics predicted on Friday that in such a situation, investor confidence may decline in the near future. In a post-election commentary, Moody’s Analytics said that the results of the Lok Sabha elections mean that the equations in Parliament are going to change, as coalition partners will try to influence and take advantage of policy decisions. According to the commentary, however, this will help in getting a more inclusive approach to governance.
The review titled ‘India Election Review: Voters force BJP to run coalition government’ said, “The BJP will have to resort to negotiations and compromise to maintain the government. This may slow down the decision-making process and perhaps slow down some of the party’s major policy initiatives.” The BJP has won 240 seats in the 2024 general elections, while earlier it had won 303 seats in 2019. However, in this general election, the BJP-led NDA got 293 seats in the Lok Sabha, which is more than the majority figure of 272.
Moody’s Analytics said that although Prime Minister Narendra Modi has returned to power for the third time, the weak position of the BJP reflects a significant change in the political equation. Aditi Raman, Associate Economist, Moody’s Analytics, said that due to the lack of political stability and the need to build consensus, investors’ confidence may decline in the near future.
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