Economic Times of 3 May 2014 states: "Amid hopes of a stable and reform- oriented government after the general elections, foreign investors pumped in Rs 9,600 crore in Indian stocks in April, the eighth consecutive month of inflows".
Is it really true that funds are pouring in due to hopes of a stable and reform-oriented government? And that this has been happening for the last eight months? I find that a bit of a stretch. In fact, funds left India in droves around the time the rupee was plummeting around August-September 2013 and most news about the Indian economy was pretty dismal. But since September the rupee has strengthened considerably; inflation has been in check; current account deficits have fallen; in general, the economy is much better than it used to be thanks to the steps taken by the RBI and the government. Isn't it possible that foreign funds are more reactive and are coming as a consequence of the Indian economy being better than it used to be about 8 months?
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