For a Government that rode to power on sky-high expectations, the first 100 days are almost akin to the first week box office collections of a Bollywood blockbuster.
Because that’s when impressions are made and word-of mouth spreads, giving an inkling of what lies ahead – a hit or a flop.
For Indian industry, troubled by ‘policy paralysis’ in the second term of the previous United Progressive Alliance (UPA) Government, the first 100 days of the Narendra Modi Government have been action-packed as far as quick decisions and regaining business confidence are concerned.
Online environment and forest clearances for industrial projects, tailor-made labour reforms, the promise of easier land acquisition, focus on skill development, more funds for medium, small and micro enterprises to boost manufacturing, and opening the door wider for foreign investment flows in defence, insurance, affordable housing, smart cities, etc. have generated a lot of “positive vibes”.
The stock markets also cheered the new Government in June, with Modi’s initial speech promising to focus on good governance, enabled by increased use of technology, to improve the ease of ‘doing business’.
Positive sentiments By and large, India Inc is riding on great expectations from the Modi Government, but the reactions are measured when it comes to concerns over inflation, land acquisition problems and rising input costs, even as the rate of economic growth has emitted some positive signals.
“While 100 days are too short for an economic turnaround, the Modi Government’s vibes are very positive,” says Sumit Mazumder, President-designate, Confederation of Indian Industry (CII).
In particular, India Inc is pinning big hopes on the Government’s stated commitment to enhance the private sector’s role across sectors such as infrastructure, encompassing airports, railways, shipping, highways, power and real estate.
The first ‘positive vibe’ for industry regarding the Government’s intent came from its maiden Budget, presented by Finance Minister Arun Jaitley, which announced the need for a “more nuanced and sophisticated model of contracting and developing a quick dispute redressal mechanism.” Jaitley also announced the setting up of an institution – 3P India – with a corpus of ₹500 crore to provide support to mainstreaming public-private partnerships (PPPs).
“The first five years of the UPA had a lot of activity on this front, but in the next five years, nothing happened. There was no clarity on the PPP model,” says Majumder, adding the difference between the two Governments lies in planning and executing.
Notwithstanding the Government’s promise to make land acquisition easier, it still remains a contentious issue, says Majumder, adding States need to be brought into the picture. “A beginning could be made by resolving land issues in BJP-ruled States. After experiencing industrial development, other States will follow.”
Manufacturing push He says Modi’s call for ‘Make in India’ in his Independence Day speech “stole the show”, as it underscored the importance the Government gave to pushing manufacturing growth. Making India a manufacturing hub will not only save precious foreign exchange reserves, but also create employment, Majumder adds.
After Modi’s I-Day speech, industry chamber Assocham’s President Rana Kapoor had said: “The ‘Come and Make in India’ call to global investors is a big message for investors… It also shows his (Modi’s) commitment to see that the country becomes not only self-sufficient in manufacturing, but also becomes a global supplier of industrial products.”
According to Kapoor, “there is clarity when it comes to specifics since the areas for manufacturing focus have been well identified and were narrated by the Prime Minister himself – like electronic hardware and agricultural value additions.”
Delivery mechanism Industry is also upbeat about the Government’s early focus on improving the delivery mechanism by pushing e-governance as well as the launch of the ambitious ₹1.13 lakh crore Digital India project, which it feels will boost mobile phone sales, lure investments into electronics manufacturing, boost trade and employment.
“The plans are very encouraging. We are waiting to see them happen,” CII’s Majumder says. That said, many in India Inc feel ‘delivery’ will eventually define the performance of the Modi Government, as the proof of the pudding lies in eating. Ravi Uppal, Managing Director and CEO, Jindal Steel and Power Ltd, says the Government needs to be given more time as it is still struggling to come to terms with a lot of issues.
“I think the Government needs to improve its delivery. My suggestion is that the Prime Minister’s Office should look at clearing the ₹3,00,000 crore worth of stuck projects as these are projects of the same people who have to invest in the future.”
‘A good beginning’ Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd, says a “good beginning” has been made, but so far the Modi Government’s achievements are a “mixed bag”.
While admitting that the Government has started functioning properly, with proper coordination between ministries and departments, Oswal says: “The Union Budget was meek and bereft of bold reforms… At the corporate level, a large number of stuck projects have been cleared, but money has not started moving in these projects.”