Concerns are mounting on India's economic policy front, shows the India Economic Policy Uncertainty Index. The index has been wobbly lately and shot up again in June to 137.61 from 83.04 in May and 137.18 in April. The chart below shows the volatile trend in the index.
The jump seen in June can be attributed to the outcome of the general election, which differed from the Street's expectations of a majority win for the Bharatiya Janata Party. A fractured mandate caused jitters among investors causing fears about policy continuity.
Against this backdrop, a crucial near-term event to watch out for is the Union budget 2024, scheduled on 23 July. Equity investors would be keeping track of the government's fiscal push. Wide-held expectations are that the government would announce a balanced budget that will aim at fiscal consolidation and give manufacturing and consumption sectors a boost.
Apart from that, the monthly retail inflation data, progress of the monsoon in July and likely impact on the Reserve Bank of India's interest rate cut outlook are important factors that would shape India's macro-economic scenario.
