It is election season in India. The 2019 Lok Sabha elections started on April 11th and by the end of May, the country will have a new government. Opinion polls put Prime Minister Modi as the favorite, but he faces tough opposition from Rahul Gandhi, president of the opposition Indian National Congress party. These elections come in at a crucial time for India. January and February 2019 data were not encouraging yet it seems that economic conditions have improved slightly in March. Exports increased in March (+11.0% y/y after +2.4%). Disinflationary pressures have receded with wholesale prices rising +3.2% y/y in March (after +2.9% y/y). Credit conditions have improved with two policy rate cuts since the start of the year. Fiscal policy has turned accommodative as the government announced measures such as direct cast transfers and tax relief for households ahead of the election. In this context, we expect economic growth to be robust in FY2019-20 at +7.1%.
