If you’ve ever thought that American elections take on a certain element of the carnival, you should experience or follow Indian elections at least once. Essentially a five-week free-for-all, more than 800 million people are eligible to vote in nine-phases which run from April 7 to May 12 this year. Because typically voter turnout is about 60 percent, if the average turnout rate holds, 100 million more people than live in the US will cast ballots in India.

Seeing that process through is an expensive proposition, with this year’s elections in India ultimately being estimated to cost at least $5 billion. They will likely cost much more once all of the candidate spending figures are accounted for. More than 200,000 security personnel have also been deployed to ensure a peaceful process.

While it is still too soon for official tallies, Narendra Modi is already being called the next Prime Minister of India.

While India has liberalized some of its economic policies over the years, in a government dominated by the Congress Party, the country’s subsidy program remains at a bloated INR2.2 trillion, covering everything from food and fertilizers to diesel fuel. There’s also still a streak of protectionism in the country’s economic policies, making foreign investment in India somewhat spotty. That has helped keep the country’s fiscal deficit stubbornly in the neighborhood of 5 percent of gross domestic product.

Already a three-term chief minister of Gujarat, the seventh largest state in India with a population similar in size to Italy, Modi has developed an almost peerless record for being business-friendly. Over his time in office the roads in Gujarat have become some of the best and most expansive, businesses have flourished as red tape has been slashed, and government headcount in the state has shrunk. He also helped to attract huge foreign investment in Gujarat, creating one of India’s leading industrial states.

In some news reports, Modi is even being referred to as the Indian Ronald Reagan; a member of the more conservative Bharatiya Janata Party (BJP), Modi’s free market economic stance is a clear contrast to the Congress Party’s more liberal, state-driven economic ideas. Many believe Modi’s elevation to PM will mark a watershed moment for the Indian economy, which is struggling with sluggish growth and high unemployment, particularly among the nation’s 1.2 billion people under 25. It’s estimated that 12 million new jobs need to be created each year to absorb the country’s growing workforce.

But while Modi’s success in Gujarat has led to high hopes he’ll be able to achieve similar results on a national scale, it’s not guaranteed.

For one thing, Modi’s strategy has focused primarily on attractive capital-intensive heavy industries to his state, and has been widely criticized for not creating a better class of jobs. Also, without radically easing the process by which foreign companies can invest in India, it would be difficult to drive such large-scale industrialization across the country.

At the same time the BJP’s track record at the helm of the national government is a bit spotty. When it last ruled, from 1998 to 2004, it made little headway on labor reforms, and strict job protection measures and wage rules are sacred cows in Indian politics. That’s one of the key reasons why the Congress Party with its populist brand of politics has been able to maintain its control of the government for so many years.

 It should also be noted that current Prime Minister Manmohan Singh, with a doctorate in economics from Oxford, also promised wide ranging labor and economic reforms over his two terms but made scant little progress because of the political realities in the country. In fact, Singh is widely criticized for “governance by non-governing” because it is so incredibly difficult to build a consensus thanks to radically diverse regional needs and beliefs.

But after years of graft scandals, the weakest period of economic growth in more than a decade and torrid capital outflows that have devastated the rupee, it’s hardly surprising that Modi has received such strong support. The real question is whether or not he’ll be able to rally enough support in such a huge, diverse country to make any progress on an agenda of meaningful reform.

Portfolio Updates

So far in 2014 the Indian equity market has returned nearly 6 percent, with much of that gain coming since early March when Modi officially got the nod from the BJP and opinion polls were turning in his favor. Then, in mid-April, shares of Dr Reddy’s Laboratory (NYSE: RDY) also began to turn upwards, more than 8 percent since then.

While part of that gain can be attributed to improving expectations ahead of the company’s May 13 earnings release, it’s also being driven by expectations that Modi is likely to reduce government involvement in India’s drug pricing scheme. It also expected that Modi will also likely work to maintain a relatively loose intellectual property regime, benefiting Dr. Reddy’s ability quickly churn out generic versions of name-brand drugs for sale in India and other emerging markets.

With a Modi government likely to create an even more favorable regulatory regime, Dr. Reddy’s Laboratories is a buy up to 50.