India’s economic policy trajectory will continue regardless of Modi’s win or loss, says Raghuram Rajan

India will likely maintain its economic policy trajectory whether Prime Minister Narendra Modi wins a third term in office or not, former central bank Governor Raghuram Rajan said. 

“There is a lot of continuity built into Indian policy,” Rajan said in an interview Tuesday with Bloomberg TV’s David Ingles. “Whatever government comes in will take a lot of the good stuff that has been done and continue it.” Rajan, now a professor of finance at the University of Chicago Booth School of Business, was speaking on the sidelines of the UBS Asian Investment Conference in Hong Kong.

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The new government will announce a budget shortly after it comes to power, which will likely focus on “all the good stuff that is happening while trying to see what other changes have to be made,” he said. 

India’s six-week elections comes to end on June 1, with results expected on June 4. Modi’s Bharatiya Janata Party is widely expected to return to office, although there’s uncertainty about whether it will be able to expand its majority as Modi has been predicting. Financial markets are bracing for a possible selloff if the BJP loses support, concerned about a possible shift away from economic reforms.

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Rajan said the infrastructure spending under the Modi government was necessary given the huge deficiencies in the country. However, going forward India needs to focus on the quality of its infrastructure and make sure the investment doesn’t just benefit the major industrial firms. 

Bloomberg Economics estimates India will spend 44.4 trillion rupees ($534 billion) on building new infrastructure between 2024 and 2026, which will help lift economic growth to 9% by 2030.