New Delhi: Irrespective of the results in the assembly elections, it is certain that the poll outcome will have a repercussion on the upcoming economic policies of the government. Congress’ defeat in states like Uttar Pradesh and Punjab is going to affect the pace of economic developments.

With Samajwadi Party clinching power in UP, the government’s plan of FDI in retail, pension reforms and increasing FDI in insurance may face stiff resistance. Samajwadi party supremo Mulayam Singh has always opposed such policies.  On the other hand these plans are considered to be very important in bringing economy on the faster growth trajectory. 

According to experts, the Congress after the shattering defeat in assembly elections will not be in a position to take confident economic decisions. Due to lack of political consensus in past, the government had not been able to implement these policies. Few people are conjecturing that congress will increase pressure on Centre to take popular decisions after the defeat. In few days time the government is going to table the budget for 2012-13.

Stock markets have also responded negatively seeing the results of the assembly elections. Stocks of companies that have big investments in Uttar Pradesh registered a fall on Tuesday.  Jayprakash Industries and Anil Dhirubhai Ambani Group (ADAG) shares have fallen due to their projects in UP.
MD of SPA Capital Sandeep Parwal has clearly said that the Congress will be weakened by the election results. Chaiman of SMC Investments D K Aggarwal has said that the Samajwadi Party’s role in national politics will increase manifold and the Centre will face difficulties in taking decisions on economic front. 

Decision on increasing petroleum prices, power reforms in states and FDi had been deferred keeping assembly elections in mind. The government is due to take decisions on these issues soon.