India's Congress party-led ruling coalition has sidestepped differences with its leftist allies to finalize a policy roadmap, allowing it to get down to business after this month's shock election victory.
The policy blueprint for five years, called the Common Minimum Programme, was finalized late on Wednesday after long negotiations with the communists, who have their own views on the country's crucial economic reforms.
Markets had worried that the leftists could dilute or delay the reforms in exchange for supporting the government, but those fears have largely been allayed.
The program was due to be formally announced after the markets closed yesterday.
"Though there may be some areas of differences, by and large we will endorse it tomorrow," Sitaram Yechury, spokesman of the Communist Party of India (Marxist), the largest of the four leftist parties in the coalition, said late on Wednesday. Coalition leaders said that, among other things, the communist parties were insisting on a halt to privatization of "strategic" ports and airports, a process that was begun by the previous pro-reform Hindu nationalist-led government.
Overall, the allies agreed to pursue economic reforms in an attempt to place Asia's third-largest economy on a 7 percent to 8 percent growth path according to the final draft of the common minimum program, details of which emerged after Wednesday's meeting.
The coalition, as expected, agreed to be more cautious on privatization of state firms and not sell profitable companies.
It also agreed to retain majority control in state-run banks, continue with food and fertilizer subsidies and promote foreign investment to help create jobs.
Prime Minister Manmohan Singh's Congress party said it did not expect the communist parties -- which are not part of the government but support it from outside -- to create hurdles in the path of governance.
"They are supporting us from outside, their candidate will be the speaker [of parliament], so I think we have no reason to be worried or disappointed," said Congress spokeswoman Ambika Soni.
The policy document is keenly awaited by markets and investors who were spooked by the rise of the communist parties, leading to a record fall in the country's main stock market index earlier this month.
The stock market drifted 0.4 percent lower yesterday morning, having lost 0.8 percent over the previous two sessions. The rupee was weaker for a fourth straight session while bonds were broadly flat.
Investors said markets had factored in the policy document and the weak sentiment was due to the absence of foreign investors. The details emerging from Wednesday's discussions had allayed earlier fears, they said.
"There were really no surprises in the policy, so the CMP is really a non-issue as far as the markets are concerned," said Malay Sameer, associate vice president of HDFC Securities.
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