SINGAPORE, June 5 Reuters India39;s closerthanexpected election should increase the prospect of productive reforms, the country39;s chief economic adviser said on Wednesday, while the fundamental drivers of growth remain largely independent of government policy.

Voters returned Prime Minister Narendra Modi for a third term but with a reduced margin that has left his Hindu nationalist party needing coalition partners to govern.

Stock markets tumbled on Tuesday on investor concerns that thorny economic reforms may be postponed but recovered some losses on Wednesday. The government39;s chief economic adviser, V Anantha Nageswaran, said many tricky reforms were in state government hands and he viewed them as more likely to progress.

In some cases the responsibility is disproportionately on state governments, subnational governments, he said, addressing an investor conference hosted by Nomura in Singapore.

I would even say that the election outcome increases the probability of some of these factor market reforms happening, rather than lowering it, because it creates avenues for dialogue and consensus building.

The factor market refers to land, energy, labour and other inputs in economic production.

Nageswaran was appointed to his role in 2022 and is one of the government39;s key advisers on economic policy. He also authors India39;s economic survey, a document that indicates the government39;s policy direction and serves as a precursor to the budget.

He said the next…