Last May when Shri Narendra Modi got a thumping victory and was unanimously elected as the Prime Minister, the stock markets gave a resounding applause with the super rally. India Inc was in celebratory mood and the financial markets wore a festive look. One year down the line, the gains have become subdued and the euphoria has dimmed.
What could be the reason for that is Corporate India unhappy with the kind of developments that has taken place? Is enough not being done in the sense of real work at the ground level? Is their need for more constructive execution and has the Govt failed the people’s expectation in terms of real ground level execution?
When you speak to Corporate India on the issue one fact and one fact alone comes in big bold manner. Corruption, one of the major scourges of pointed development in the UPA Era, has been dealt with in a tough manner. Corporates across the country agree that corruption even at the highest levels has seen significant decline and connections are not sufficient credentials for corporate any more. The e-auction of the coal block sand spectrum allocation is perhaps one of the best manifestations of the Govt’s effort to bring out more transparency in its actions.
However the over centralization of the policies and decisions is being seen as a bottleneck. The PMO is cautious about every single policy decision across portfolios from defence to foreign policy. Mr Modi is seen as a very industrious Prime Minister who spends 17-18 hours regularly in streamlining procedures but it is also seen as a reason why policy making and actual ground level execution has slowed down. The Govt and the BJP maintains that Modiji’s policies are geared at long-term enhancement of services rather than a piece meal short-term stop gap solution.
The economy continues to be the Govt’s major concern. Inflation has been contained to a large extent but this has not translated into effective IIP growth yet. Investment across corporate India has not picked up at a desired level and banks are not open to increase their debt exposure at the moment. The expectation of a below average monsoon this year could further complicate the economic challenges.
On the reforms aspect too, overall progress has been a slow paced one, albeit steady. However outside the realms of economics perceptible change of the Govt’s policies is yet to be felt in a ignificant way apart from small pockets like stupendous response to PM’s Jandhan Yojana.