Economists from Columbia and University of California at Berkeley and Santa Cruz, all of whom have expertise on the Indian economy, hailed Prime Minister Manmohan Singh's return, especially because the government will not have to depend on the Left that made the government's economic liberalisation programmes difficult at times in the past.
"There is no doubt that some reforms the United Progressive Alliance wanted to implement such as opening up the insurance sector to foreign investment and establishing the Pension Regulatory and Development Authority, but could not due to a fractured coalition government, will now be carried out speedily," Arvind Panagariya, Jagdish Bhagwati Professor of Indian Political Economy at Columbia, said.
Agreed Nirvikar Singh, professor of economics and co-director of the Center for Global, International and Regional Studies at the University of California, Santa Cruz.
"The Congress, without the Left, can get things done easily. It is straight forward that having the Congress back in power with the reformist team and without the Leftists, you are going to see acceleration in the reform and as you know it was under the Congress that very well-articulated reform agenda was started," Singh said.
One of the reasons why the Congress has won, Singh said, is that they also included "a strategy component" of getting the benefits of growth out to rural areas".
"I think we are going to see the continuation of that two-pronged strategy where you have the benefits of the reform of the modern economy going to the middle class and you also have these programmes benefit the poor. I think this is a fantastic outcome for India," Singh said.
"Frankly, the Left does not have any intellectual credibility and I think it is good that we are not dealing with Hindutva ideology. So, I see this as a very pragmatic outcome," he said, adding that he is very proud of Indian voters.
"They have gone for good governance. In Bihar, they did not back the Congress, but they backed Nitish Kumar's good governance. This is a fantastic validation of Indian democracy," Singh said.
Pranab Bardhan, professor of economics at UC Berkeley, who has examined land reforms and productivity in West Bengal and has critiqued the current leadership of the CPI M on the method of land acquisition for industry, seemed to be equally impressed with the electoral results.
Terming the outcome remarkable, Bardhan in an e-mail, said, "It is indeed remarkable that the Indian electorate has simultaneously clipped the wings of Advani, Karat, Mayavati, Laloo, Mulayam, Jayalalithaa and while rewarding better governance in Bihar, Orissa, Tamil Nadu, Gujarat, and Madhya Pradesh."
Panagariya said the Left's defeat has been long overdue, especially in Bengal.
"I have been puzzled for long by the total absence of anti-incumbency, which has now struck. But more importantly, the Left has been seen by voters as a spoiler, blocking virtually anything and everything the government has wanted to do," he said.
"I think their opposition to the nuclear deal hurt them the most. It is also possible that young voters who have no patience for the Left's obstructionist stance have played a decisive role in this election. Finally, the Nandigram and Singur sagas probably did help Mamata Banerjee (because) the state government mishandled land acquisition for industrialisation," Panagariya said.
Rajiv Khanna, president, India-America Chamber of Commerce, welcomed the Congress party's victory, saying it will speed up economic reforms.
"We certainly hope that with the new mandate, the UPA government will move swiftly towards the business of speeding up reforms in all sectors. The Indian electorate gave the Left what they deserved, a resounding rejection of policies and ideas that belongs only in history's dustbin," Khanna, who invited Dr Ashwani Kumar, India's minister of state for commerce and industry, to keynote the 2009 India-America Chamber of Commerce meeting earlier this week, said.
"The real question, however, is whether the new government will get back to reforms in earnest, picking up where the National Democratic Alliance left in 2004. Here I am hesitant because I am not convinced that Sonia Gandhi and Rahul Gandhi truly believe in pro-market reforms," Panagariya said.
"They (the Congress) are bound to see the current victory as vindication of their policies of a shift away from reforms that in their view only help the corporate sector. They are likely to favour populist measures since in their view it is this shift for which the electorate has handed them a clear victory," Panagariya added.
Singh disagrees.
"To finance populism," he said, "you have to have growth and in order to have growth you have to have reform. I think the leadership understands that clearly. So, populism is inevitable. You see that even in the US, but that does not preclude an approach that can be growth-friendly and reformist. I am not too worried about that."
