The keenly-awaited results of assembly elections in five states did not spring any major surprise except AIADMK chief Jayalalithaa bucking the anti-incumbency in Tamil Nadu (the first time since 1984). For markets, the key question is – will these electoral results improve NDA’s (the ruling coalition) count in Rajya Sabha where many important bills have stuck for lack of coalition’s majority? The answer is that the assembly election results will not have significant bearing on the composition of the house.

The composition Rajya Sabha changes quite gradually, as a third of its members retires every two years; hence, in the remaining part of the present year, 56 seats will be up for reelection. Even if the dominance of Congress (67 seats) were to go and BJP (48 seats) and regional parties such as TMC, AIDMK, SP, BSP, JDU etc (~70 seats) were to gain ground, the ruling coalition will still be nowhere near a simple majority even till 2019. Hence, legislative success will involve successfully reaching out to regional satraps. Even though TMC expressed support for GST bill, this alone may not be enough to pass the bill in the monsoon session.

In an interesting development, the government started off consolidation of banks by pushing ahead the idea of creating a new banking behemoth by merging SBI (State Bank of India) with its associate banks and Bharitya Mahila Bank. This places the Indian banking industry in an interesting phase where consolidation and competition are being vied at the same time! Note the RBI has already started inducing more competition by issuing bank licenses including to small and niche players (payments and small finance banks).