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

India is likely to maintain its economic policy trajectory whether Prime Minister Narendra Modi wins a third term or not, said former central bank governor Raghuram Rajan.

“There is a lot of continuity built into Indian politics,” Rajan said in an interview Tuesday with Bloomberg TV’s David Ingles. “Whatever government comes in, it will take the many good things that have been done and continue them.” Rajan, now a professor of finance at the Booth School of Business at the University of Chicago, 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 soon after coming to power, which will likely focus on “all the good things that are happening while also trying to see what other changes need to be made,” he said.

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

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Rajan said infrastructure spending under the Modi government was necessary considering the huge shortages in the country. However, in the future, India must focus on the quality of its infrastructure and ensure that not only the largest industrial companies benefit from the investment.

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

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