BJP is more 'pragmatic' than the Congress, says this analyst

As the stock market reaches new highs every day and the rupee continues to trade at 60-levels, another economist has come out and said that it is the hope of a more 'pragmatic' government in the form of BJP led by its Prime Ministerial candidate Narendra Modi that the markets are factoring in.

"The big difference and the big change that people are expecting from the current Congress-led government to a Modi-led BJP government is what I would call a change from a philosophical ideological approach to development to a pragmatic, practical approach," former Chief Economic Advisor Arvind Virmani told NDTV. (Watch: Video)

Mr Virmani joins a slew of analysts who have attributed the surge in the markets to hopes of a Modi-led government.

Nifty broke into 6650-level for the first time on Thursday while the Sensex hit 22,263, setting a new high.

While the political factor plays an important part, Mr Virmani, who was also an executive director with the International Monetary Fund (IMF) attributed the capital inflows into the country, to India offering better returns for investors vis-a-vis other emerging markets.

"I think it's an interaction of the India political change with global developments. Globally in terms of expected returns...the returns in other countries are even worse at this point in time than in India. So there is this genuine interest from outside for whatever reasons whether it's the weakness in Brazil and Russia or the Chinese bubble," he said.

However, from a macro perspective, the state of the India economy continues to be abysmal, Mr Virmani pointed out.

"This is the first time in something like two or three decades that we have had a growth rate of less than 5 per cent in two consecutive years so the economy as it stands doesn't look good at all," he said.