The landslide victory for the BJP has raised the hopes of the industry honchos who are hoping that the mandate will be used by the new Government to push through tough economic reforms. Here are the initial reactions of corporate India.
Anirudh Dhoot, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA), and Director, Videocon.
“The 2014 general elections have been a phenomenon, because of the upsurge registered in the voter turnout this time. As the president of Consumer Electronics and Appliances Manufacture Association (CEAMA), I extend my heartiest congratulation to the new government. The consumer durable industry looks up to the new government in framing guidelines and initiatives that will pave the way for growth, advance technology and innovation. We further expect a transparent tax policy, and interest rate rationalisation which will lead to competitive level playing opportunities. With the ensuing budget aiming to stabilise the economy, there will be a turnaround in the consumer sentiments. CEAMA foresees an improvement in the industry standards, eradication of grey markets and an overall boost to the sector. The upcoming term will witness a significant increase in foreign investments and further avenues for development.”
The decisive mandate handed to the Narendra Modi-led BJP reflects India’s overwhelming desire for strong leadershIp that will drive change. Change in the way the country is administered; change in the way policies are framed; change in the way India does business; change in the way it engages with the world; and change in the way the government addresses the aspirations of a billion Indians These are tall expectations and the new government will need to take immediate steps to revive the economy to signal change. This will call for swift action to implement bold economic reforms that create jobs through massive infrastructure projects, roll back unfriendly business regulations and instead focus on speed and ease of doing business that attract large domestic and foreign investment; and above all provide transparency and accountability in governance. The new government has been provided a historic opportunity to bring positive and far-reaching change, it must do so with responsible objectivity that lifts the spirit of a billion Indians.”
Vineet Nayar, Founder, Sampark Foundation & Former CEO, HCL Technologies
As 800 million Indians exercised their vote in the largest democracy of the world, debates, comments and opinions have been simmering in every kitchen this past month. While all of us have had our say on which party we wanted to see in power, I wonder if we as a nation now have a collective view on what are the most important issues that we want the new leadership team to fix?
In my view, the new leadership needs to focus on three broad areas. First, deliver efficient governance at the bottom of the pyramid so that every Indian feels the change which he or she has voted for. Two, drive effectiveness in executing programmes and policies already in place so that the wheels of the Government moves much, much faster and we see a sense of urgency to get things done. The goal should be to cut the decision time down by a factor of 10. Three, define and execute on a bigger, bolder vision for the country that gives India a competitive advantage in the global markets of trade, commerce and share of voice in key decisions that impact the world.
Lastly, our young population is the biggest mass of our national identity and competitiveness and the focus of our nation should be around enabling, enthusing and empowering them. If we can build their knowledge and skills, they will become tremendous economic assets otherwise they will be relegated as cheap labour and consumers for the West’s production engine and we will continue to be an ‘emerging nation’ forever!
In gist, what we need from the new leadership team at the Centre now is clarity of purpose, a few ideas that are transformative and a will to execute on them. The measure of success this time will not be the GDP growth rates but what happens with Naukri, Kitab aur dukan (job, education and eusiness) for millions of Indians who have voted for change, for hope and for a better tomorrow that they most definitely deserve.
Malvinder Mohan Singh , Executive Chairman, Fortis Healthcare Ltd
This is a decisive mandate in favour of Mr. Narendra Modi and the BJP. The clear majority will allow the Government to take the difficult but right decisions required to unleash growth and move the country and the economy into a higher orbit. Clearly there are also great expectations from the new Government and I think they will have the room and the freedom to be able to deliver on their promises. I wish them all success.
Dr Prathap C Reddy, Chairman, Apollo Hospitals Group
“This success is the voice of half-a-billion people who exercised their franchise and made their choice in this historic Lok Sabha election. The people of India are looking for an accelerated pace of change and have huge expectations from their new leadership. Health should be declared a national priority as inclusive economic growth inherently demands a first-rate healthcare system, one that is affordable and accessible. The new government needs to drastically increase public spending on health, create a roadmap for universal health coverage, corporatise medical education and take decisive steps to remove the barriers of accessibility, cost and quality that continue to plague India’s healthcare system. Smart steps to progress need to also include a liberalised visa regime for medical tourists.
An equally urgent need is to make the Direct Tax Code and GST a reality, early on. Apollo Hospitals looks forward to working closely with the central administration and will extend all possible support in building a more robust healthcare system in India.”
Sankaran Naren, CIO, ICICI Prudential AMC
The election results 2014 are far ahead of all the exit poll expectations. Post 1984, this is the first time a single party is getting almost absolute majority. This is extremely positive structural move for the potential returns in the equity markets. It is also positive for a potential drop in interest rates over the next 18 months. Hence, it is extremely important for investors to consider investing in equities. Currently, domestic investors are extremely under-invested in equities and we believe they should allocate to equities even today. We believe that banking, infrastructure and mid-caps are likely to outperform the large-caps, which does not mean that large-caps will not be in a position to give returns. With regards to fixed income, investors should consider moving out of all defensive fixed income products to much more aggressive ones.
Gaurav Gupta, Senior Director, Deloitte in India
Given that the flavour in this election seems to be better governance and economic development, people would expect the new stable government to implement its reform agenda that will benefit the consumer business and retail sector in various ways, including improved consumer and business confidence, better infrastructure development, containing inflation/interest costs and better governance that makes it easy for people to do business. While a lot of discussion has happened on the retail FDI, it is only one component of the growth story. A stable government will give confidence to international and local firms to make investments tied to the unquestionable long-term growth story of India. The challenge for new government will be to move quickly on some of these aspects and implement a framework that can lead to more inclusive growth increasing the overall potential for companies in the consumer business and retail sector.”
Sandeep Ghosh, CEO for Bharti AXA Life Insurance.
A strong government at the Centre will help in pushing through long pending policy decisions around FDI, taxation and long term investments.
FICCI President Sidharth Birla
FICCI congratulates the nation for giving a decisive mandate and felicitates Mr. Narendra Modi for leading NDA to a historic victory. A clear mandate is positive for India. It is amply clear that the country, especially the youth, wants development and good governance. FICCI hopes that this mandate will help the leadership restore much needed investor confidence, attract higher investments and generate employment, especially in the manufacturing sector. The nation awaits an era of minimum government and maximum governance. Industry must be seen as a key factor in the nation's advancement by enabling efficient provision of goods and services and creation of jobs.
Rana Kapoor, President, Assocham and MD & CEO, YES Bank
This clear mandate for Shri Narendra Modi and the NDA reflects the nation’s mood and huge expectations. I believe the new Government will take bold decisions to fast track economic growth and fulfill expectations of the 1.2 billion Indians. I wish the new Government all the very best. A majority mandate gives hope of a stable Government, paving the way for bold and decisive policy reforms. This, complemented by the animal spirit of Indian enterprise, can herald a sustainable 10 per cent growth of the economy in the next 18-24 months.
Richard Rekhy, CEO, KPMG in India
Chanakya perhaps foretold India’s current predicament 2300 years ago, “In the absence of fruitful economic activity, both current prosperity and future growth are in danger of destruction”.
The prospective government must direct growth through a three dimensional agenda- short-term, medium-term and long-term, to be sketched at inception. It is critical to adopt the ‘one mandate and one vision’ under a strong, central PMO coordinating the Centre and States freed of silos, with steps forward consistent with the one consensus approach.
Monitoring end use of funds; implementing cost effective measures; restoring credibility of key institutions; observing transparency & consistency and adopting an integrated perspective form prominent softer aspects of policy reforms.
The reforms framework should be driven by making it easy for people to do business in India and confirm with best international practices. To ensure overall development, it is necessary that 6-7 areas are shortlisted and driven through a central monitoring agency. These include all major infrastructure projects, reviving manufacturing by creating an eco system, viable agriculture, linking food processing and retail to modernised agriculture, labour reforms, land reforms and public housing.
The Government should invest in resources in other parts of the world, for example - Africa to ensure consistent and competitive supply of natural resources.
It is time to relook at all the subsidies given, privatisation of the public sector, workable PPP model.
Sunil Kaushal, Regional Chief Executive, India & South Asia, Standard Chartered Bank
One, this is a definitive moment for India polity given the clear mandate. Secondly this comes in at an opportune time when some of the key indicators are positive – leading economies are showing growth, CAD is under control, the rupee is relatively strong and there’s low-risk of downgrade. It’s also the beginning of a cyclical upturn – if we manage our internal challenges, it should provide the take-off for over 6 per cent growth next year.
However, a few issues need to be resolved, including accelerating project clearances and partnering State Governments for speedy execution and resolving payments stuck with the administration to release cash into the system for significant trickle-down impact for smaller players.
To ensure efficient distribution of subsidies, Aadhar should be taken to its logical conclusion. The initiative on fuel subsidy reduction should continue. Open issues around taxation for MNCs should be resolved quickly as there are many MNCs eager to do business in India.
However we need to be cautious as well - expectations have peaked with a clear mandate, and there’s a chance we will slip into cynicism if positive results take some time before showing up.