rewrite this title and make it good for SEOWhat do Bihar Poll results spell for market, economy?

Mumbai: Equity strategists and economists at brokerages said the key takeaway from the outcome of the Bihar election results was the role of the cash transfer in determining the result.

While the market is expected to cheer the incumbent National Democratic Alliance’s victory in the country’s third most populous state, as reflected in the late rebound on Friday when global cues were weak, there are concerns over the effects of the cash dole-outs on the fiscal deficit. A look at brokerage commentary after the results:

Macquarie Large cash transfers done ahead of elections is a populist move which has significant fiscal deficit implications. The cash transfer of ₹10,000 done to 2.1 million ahead of elections seem to be a successful model to win state elections. Jefferies Generous cash transfer schemes at the states and back-to-back tax cuts by the Centre tilt the preference towards consumption. Preferred stocks to play that theme include Bharti, Vishal Megamart, TVS, Crompton Consumer, Godrej Consumer, Marico and Jubilant. Emkay Global

Increasing subsidy/freebie spending is set to put upward pressure on states’ fiscal deficits in the years to come. The so-called ‘ceiling’ of 3% FD/GDP for states is now going to be the floor; after two successive years of +3% deficits, we do not see this reducing anytime soon. JM Financial Expect markets to react positively, considering that it will add stability to the coalition at the Centre. Women-centric cash transfer scheme played a major role in improving the women voter turnout, as reflected in the results as well.