How Do the Recently Concluded Elections Affect the IT MSMEs?

The recently concluded elections have been in the centre stage news in the mainstream media. They upstaged even the Ukraine crisis in media coverage in India. However, they don't seem to have affected the IT MSMEs in any way.

While the IT MSMEs have their own political preferences just like everyone else, when it comes to discussing the impact of the elections results in 5 states of India, they don't appear very enthusiastic about this discussion. This is significant because these 5 states are very important in the Indian economy. Punjab and Uttar Pradesh are very large states with a large network of IT partners and manufacturers of IT gadgets and service providers. Goa, Uttarakhand and Manipur are the emerging states in the IT sector in terms of supplies of hardware, software and services.

However, some IT leaders are vocal about their views. RK Bansal, Owner, Uniline Energy Systems said that these results reflect optimistic times for the IT businesses in these states, as the Central government has a large focus on digital economy.

"In my view the state election results are good for the IT MSMEs, as the Central government has a large focus on the digital economy and infrastructural development. This will help the IT businesses in these states."

--RK Bansal, Owner, Uniline Energy Systems

When asked about the impact of these elections on the IT sector in these 5 states, some IT MSME leaders even said that change of government won't have any impact on the IT business one way or the other

The perception of the IT leaders that the results may not have any impact on the IT sector may not be completely founded on reality. This is because every government has its own policies and its own ways of implementing the Central government's policies.

As is well known by now, 4 out of 5 states have seen the majority votes going to BJP. This party is well known for giving advantages to the business sector, which forms its backbone of political support. It remains to be seen how far the IT MSMEs manage to get advantage out of the pro-business approach of the BJP, with its added advantage of having cordial relations with the Centre.

Punjab is an exception where AAP has taken a sweeping majority votes and has upset all previous combinations. Punjab is known for two types of economies - business and agriculture. It has also showcased its governance of Delhi as a model for Punjab. Hence, it would be interesting to see how far the IT MSME leaders manage to take advantage of efficient governance promised by AAP and grow in IT sector. There is another dimension attached to it - in Delhi, AAP and BJP have to work together in governance, because Delhi happens to have both parties in ruling capacity. This will likely have a positive impact on Punjab, because AAP will be in a negotiating situation with the Centre in terms of implementing its policies in Punjab because of its collaboration with BJP in Delhi.

Next year is interesting to watch for the IT sector in these 5 states because of the unique relationship these states have with the Centre.

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