India’s 2014 elections are major area of uncertainty: Goldman Sachs

India’s 2014 elections are major area of uncertainty: Goldman SachsIndia's Parliamentary elections in 2014 will be a major area of uncertainty, which would have impact on the country's policy reforms and investor sentiment, Goldman Sachs said.

In its latest investment research report, Goldman Sachs cautioned that emerging markets would suffer higher volatility next year and that India's upcoming elections could be a major driver of the country's capital markets.

Making the prediction about the Indian economy, it said, "The upcoming Parliamentary elections in early 2014 are a major area of uncertainty, with potentially large impact on policy reforms and investor/corporate sentiment in either a positive or negative direction."

The investment bank also predicted that the Indian economy would likely grow at an annual rate of 4.3 per cent during the current financial year and 5.5 per cent during the FY2014-15.

The list of potential upside risks to the economy's growth includes pent-up investment demand in sectors like infrastructure, while downside risks include bigger-than-expected increases in policy rates and harsher external funding conditions.

The report clearly warned that there were no signs to suggest any notable rise in investments and factory production.