MUMBAI, India – India Inc. breathed a huge sigh of relief Sunday, a day after the ruling Congress Party won one of the most definitive electoral victories in nearly two decades of fractious coalition politics.
Congress' victory — and the near-collapse of India's once-powerfulcommunist parties — means key reforms in insurance, pension funds, banking and retail are now likely to get enacted.
But that doesn't translate into a mandate for sweeping pro-market liberalization, analysts say.
The global financial crisis has tempered India's appetite for deeper foreign investment and looser regulation. Moreover, Congress, which oversaw an unprecedented four-year boom, has cast itself as the party of "inclusive growth," a policy approach aimed at helping India's vast underclass while also pushing free-market reforms. It is unlikely to roll back costly social welfare programs that helped the party win the election — but also added to the nation's burgeoning fiscal deficit.
With the Congress-led coalition capturing 262 seats in India's 543-seat Parliament, Congress officials were in talks Sunday to finalize their political alliance — seeking the 10 additional spots needed to nudge them over the halfway mark in Parliament.
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