UPAs 100 Days: Mixed Views From India Inc

Mumbai/New Delhi, Aug 30 | Updated: Aug 31 2004, 05:30am hrs
From India Shining to increasing inflation, corporate India has been quietly witnessing the shift in the economic landscape with the change in the political guard. After 100 days in office, what is the verdict from corporate India Its a mixed result. For one, the sheen that Prime Minister Manmohan Singh carries is still by and large intact. But on the performance of the government on the policy front, India Inc seems to be ready to give the government some more time to come up to their expectations.

Says Mahindra & Mahindra chairman Keshub Mahindra, "Its not easy to manage a coalition government and its also not right to judge a government by its performance in 100 days. The government has fared well and is full of promises."

Adds Indo Rama managing director OP Lohia: "It is too early to judge. Dr Manmohan Singh is an economist and he was instrumental in bringing economic reforms in India. We have great expectations from him."

But predictably, not every CEO is happy with the way things have moved in some of the sectors. Ask Marico Industries chief executive officer Harsh Mariwala and he says the government has done nothing for the sectors where his companies operate. "The new government has not done anything beyond what was done in the budget ie (uniform VAT). However, I see some ministries more active than others, like civil aviation and finance. But in case of the finance ministry, one will have to wait till the next budget."

In fact, this is exactly what finance minister P Chidambaram has also been saying: that the real reforms from North Block will actually happen when he readies himself to present the next Budget. Crucially, many CEOs also understand that hard decisions will not be easy to take in a coalition government. Says Hiranandani Constructions Pvt Ltd managing director Niranjan Hiranandani says, "At least the tone is correct. However, the interpretation also has to be right." GE Shipping managing director Vijay Sheth gives the government a high rating, "Given the baton to run the country, the team spirit has truely reflected in positive sentiments and spreading confidence."

Inflationary pressures seem to be an area of concern for many CEOs. According to VN Dhoot, chairman, Videocon group of companies, "The UPA government has done well. Forex reserves has gone up and capital market has moved up. However, due to no rain, there is a temporary inflation which will also be overcome over a period of time."

Gul Mirchandani, chairman and managing director, Mirc Electronics Ltd adds, "Consumer demand has been buoyant. There has been a 35 per cent increase in volumes of consumer durbale products. However, margins are under pressure because raw material inputs prices are rising." Adds Anil Khera, director-marketing, Sansui Ltd, "There is a mixed feeling of everybody in the trade. Since last one month lot of strikes have been happening as there is a tendency of all the unions to pressurise the new government for the demands. And, lately, the transport strike has paralysed the production and distribution set-up due to which the raw materials cannot come to the factory."

Confederation of Indian Industry (CII) president Sunil K Munjal sums up, "Emphasis on agricultural growth and social development of this government is something needed to further strengthen our economy. Dr Manmohan Singh has a vision of national development. Now it is the time to realise his vision. Much depend on his collegues, who would be leading developmental works in their respective sectors."