Mark Mobius says he’s ‘very much’ concerned about populist promises ahead of Indian election
India is one of Mark Mobius’ top investment picks for 2019, but the prominent investor admitted he’s “very much” concerned that Prime Minister Narendra Modi’s economic reforms may take a back seat ahead of the general election.
The national vote expected in April or May this year will see Modi seeking a second term in office. But his re-election not be an easy journey, especially after his Bharatiya Janata Party’s setback in regional elections late last year: The BJP lost its stronghold on three key states to the main opposition party, Indian National Congress.
The Indian National Congress reportedly promised farmers — which form a large voting bloc in India — that it would write off their loans in order to win their support in the coming polls. Mobius said he’s “very much” concerned that the Modi government would make similar populist moves, which would then derail reform plans and measures to keep India’s fiscal balance in check.
“Now, we’re holding our breaths to find out what Modi is going to do because if you want to get elected, you have to give something to the farmers,” Mobius, founding partner of Mobius Capital Partners, told CNBC’s “Capital Connection” on Tuesday. “So if this battle … continues, it’s not going to be very good for the budget.”