How have Indian markets fared in the UPA regime?

he UPA government has been in power over the last decade in India. During its term, we have had a series of scams and corruption scandals. In short, we had a decade of mis-rule and poor governance. Reforms took a backseat and growth suffered. And this is reflected in the stock market returns as well. As can be seen in today's chart, the annual MSCI index return of Indian stock markets was 11% amongst the BRICS nations during the last decade where UPA was in power. Only Russia fared poorly with return of 7.5%. All the other BRICS counterparts had returns better than that of India.

Considering that India was one of the fastest growing emerging markets, one would have expected it outperform other markets. However, as highlighted earlier policy deadlock and delays in decision making hurt the business prospects. This affected the earnings profile of major corporations, especially in the infrastructure and engineering space. As a result, the market returns were capped.

For Indian markets to outperform over the next decade, we need a stable government with clear policy stance which improves the ease of doing business. This shall revive the capex cycle and put India back on growth track. Ultimately, the stock market returns would follow.

How have Indian markets fared amongst BRICS in UPA regime?

^SA = South Africa