Indian government makes strong objection against Goldman Sachs for ‘Modi-fying’ view on India

The ruling United Progressive Alliance (UPA) government took strong exception of a new research report by global investment bank Goldman Sachs on India and accused the firm of meddling in domestic politics and suggesting that the opposition coalition led by Narendra Modi is set to win the general elections scheduled for next year.

Commerce and industry minister Anand Sharma told The Economic Times, "I think banks such as Goldman Sachs should stay focused only on doing what they claim to specialise in."

"Goldman's latest report on Indian economy and its eagerness to push the case of a particular political leader and his party exposes two things — Goldman is parading its ignorance about the basic facts of Indian economy; and it also exposes its eagerness to mess around with India's domestic politics," he said.

In an analyst note released early this week titled ‘Modi-fying our view: raise India to Marketweight’, Goldman Sachs rerated the investment climate in the country from underweight to marketweight based on impending political changes.

It said: “The opposition BJP-led alliance has gained ground in opinion polls in last three months and current opinion polls suggest a higher probability of a BJP-led alliance forming the next government.”

“Domestic equity investors tend to view the BJP as business-friendly, and the party’s prime ministerial candidate Narendra Modi as an agent of change. BJP and Mr Modi, in particular, have been focused on infrastructure and capital spending in the past and a BJP-led government may be beneficial for the investment demand pick-up, in our view.”

Narendra Modi is the prime ministerial candidate for the opposition in the elections in a few months.

"It is time banks like Goldman realise that over 800 million Indian voters alone shall decide the future of Indian politics and elections. And these Indians will not be influenced by the motivated campaign by agencies like Goldman, which have, in any case, left behind a graveyard of their failed predictions and projections," according to Anand Sharma.

He added, "India's growth story has always been strong and intact. What one needs to look at are the micro fundamentals of our economy (and) where the strength lies—the high rate of savings and investments.”

Goldman Sachs’ spokesperson had since then tried to cool down tempers and have clarified that it was an independent report and does not represent the author’s view of the political climate, but how market was looking at the scenario.

(Edited by Joby Puthuparampil Johnson)

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