The chances of India getting back on its feet look much brighter following the BJP's victory, the country's biggest election win in 30 years, and that raises India's growth potential to as high as 8 percent per annum, economists say.
"The resounding victory by the BJP-led alliance in Indian elections likely ushers in a period of significant economic reform in India. Reforms are likely to focus on improving the business environment, privatization reducing the budget deficit and support for inflation targeting," Shane Oliver, head of investment strategy and chief economist at AMP Capital in Sydney, said in a note on Wednesday.
"This should help boost India's growth potential back to around 8 percent per annum, after a bout of stagflation in recent years," he added.
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India's economic development has often been compared to that of its neighbor China.
China, the world's number two economy, has an official growth target of 7.5 percent and is expected to slow in the years ahead as it transitions into a consumer-driven economy from an investment-led one.
While China's economy grew at an annual pace of 7.4 percent in the first quarter of this year, India's gross domestic product (GDP) grew 4.7 percent in the last quarter, according to latest available data.
"Like China, India will become an increasingly important driver of global economic growth, it will add to commodity demand and its abundant cheap labor and cost advantages will see India play an ever increasing role in world trade," said Oliver.