The key arguments favouring such a scenario are:
– The single party majority shall imply a significant change from the era of depending on allies for every decision. With Narendra Modi at the helm, and seen as decisive leader, it could mark a major shift from how the UPA operated.
-Subsidies, especially those on the energy front, will be better managed. We are building in a scenario that the new administration lets in the first couple of price hikes on the diesel to go through to send the message.
– BJP leaders have made statements to the effect of putting capex cycle back on track, and kick starting the stalled infra projects. With a majority on their own, the ability to push through the agenda will be even better.
– Currency could be far more stable, now with political stability, and energy prices in a range.