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As results went against the Congress in four state assemblies, experts said there would be a sense of uncertainty on the economic front till a new government comes up at the Centre after the 2014 general elections.
"There would be uncertainty for at least a year till a new government comes out with a new policy on a national level," said N Bhaskar Rao, a political analyst and founder chairman of the Centre for Media Studies. He said that none of the pending bills will be likely taken up in the remaining Parliamentary sessions.
Among major bills, the government was expected to table insurance and direct taxes code bill in Parliament. Finance Minister P Chidambaram had met leader of the opposition in the Lok Sabha Sushma Swaraj and in the Rajya Sabha Arun Jaitley to discuss the two bills. However, after the assembly results, declared yesterday, hopes on these bills have waned.
Experts said that this is a precursor to the national level elections which will be held in May next year. "There would be a delay in reforms for some time now", said Madan Sabnavis, chief economist of CARE Ratings. He was of the view that nothing much can be done by the party in power in the road ahead of the Lok Sabha elections.
The biggest takeway of the Assembly poll results was a rise of the Aam Aadmi Party (AAP) in New Delhi which became the second largest party in the state. However, economists said that it will be difficult for the party to make significant changes by sitting in the opposition. "AAP can make right noises but it will be difficult to enforce immediate changes in the economic policies as an opposition party", said Sabnavis.
Some experts felt that the success story of AAP is a lesson for the political parties to learn ahead of the big battle. "Basic accountability is expected to be in the system by default as the democracy matures and all the parties have to realise this", said Jai Mrug, a political analyst and psephologist.
Mrug, however, said that the current structure cannot promise transperancy in the system but would result in more of sops politics. Mrug said that the result may give wrong signals to parties at large which would think that reform is not the key.
"Government may think reform is the culprit which is not the case. People value microeconomic freedom which deals with structural reforms that needs to be taken care of", he said.
Rao said that looking at the results, it can be said that populistic measures may no longer be the game changer for the politics of India. "People do not get lured with populistic measures unconcerned with budgetary limitations", said Rao.
Sabnavis said that inflation could also be one of the contributing factors to this anti-Congress wave across the states. Yesterday, Congress President Sonia Gandhi admitted that high prices were the issue in the elections. The wholesale price index-based food inflation has been over 18% for the fifth month in a row in October.
