Published On : Tue, May 19th, 2015

Astonishing fact emerges – even Corporate India does not feel “achche din aaye hai” after a year of Modi Government


A rejuvenated and impressively vocal Rahul Gandhi has been taking on Modi with the now famous barb
” Suit Boot ki Sarkaar.” He also said that if viewed from the common man’s point of view; or a poor farmer’s Modi would get 0 marks for his first year’s performance; but viewed from the Big Corporates angle, he would get ” 10 out of 10″.

Well, Congress Vice President has not quite done his homework it seems.

Disquieting news, but in hushed tones is emerging that Corporate India is none too happy with the state of affairs either.

They point out that Modi is Chief Minister of Gujarat was a different person than Modi as PM of the country. He is not accessible at all to any Captain of Industry and neither are his Ministers. (Well, most people are aware by now – thanks to Arun Shourie’s disclosures in a way – that except for the threesome of Modi-Shah-Jaitley, no one weilds any power anyway.)

Not just this, he is suspected to have fallen out with Mukesh Ambani and is letting it be known. While speaking to BJP, MPs a day before the Parliament session he mentioned Mukesh Ambani for the first time by asking rhetorically ” when I speak of building houses for the poor through the new Land acquisition Bill is a Mukesh Ambani going to live in this house?”

Ten days before in an interview to Hindustan Times, Modi had said red tape should not only be removed for Mukesh Ambani but also for the common man.

So when he mentioned Ambani again though despite its seemingly anodyne nature, eyebrows were raised as this was Modi’s second reference to Ambani within a span of 10 days.

Modi’s determined quest for prime ministership, by most accounts, had the enthusiastic backing of the grandees of India’s business, fed up as they were by the policy paralysis that blighted the second term of the UPA Government headed by Man Mohan Singh.

If readers remember. earlier this February FICCI members, including Kamath of HDFC Bank had spoken out about industry being unhappy with the slow pace of change even 9 months after Modi coming to power. This comment had been taken very adversely by the PM and industry bodies were warned not to make such public statements again.

So now, no one is willing to be quoted but the unhappiness is being expressed nevertheless.

At an industry meeting in Mumbai in the beginning of May , bankers expressed reluctance about funding new projects. “Nobody wants to take on more exposure. They want the existing projects to give a certain return on investment. And the government is not willing to help,” said a top Mumbai-based industrialist present for the meet.

“This government is cautious that it shouldn’t be seen as favouring certain corporate houses. So it is looking at overall policy decisions that may or may not benefit individual companies. But there are issues with individual projects which no one wants to iron out. Those have to be addressed but no one seems to be interested in doing that,” said another promoter.

Ofcourse the same nay sayers are applauding the fact that large scale corruption has decreased considerably, but they also feel that Government is over reacting in some cases. And the confidence of industry as a whole has been shaken.

Like the CBI issuing an FIR against Naveen Jindal in the Coal Scam case.

The arrest of executives and babus from important Ministries some months back for ‘leaking secrets to Corporate agents’.

Bank of America report :

In the report titled ‘Investorspeak: From hope trade to show-me trade’, BofA-ML India economist Indranil Sen Gupta said, “We met equity investors in New York and Boston last week. While almost all are overweight on Indian equities, there are indubitable concerns that nothing is really changing on the ground.”

On the rate cut, Gupta said, “I expect Rajan to cut (rates by) 25 bps on June 2, pause to allow markets price in the Fed rate hike expected in September, and then cut 50 bps more in early 2016.”

Stating that rate cuts rather than reforms are key to cyclical recovery, they hoped RBI Rajan would be allowed to take decisions to favour investors.

On the ground, some industry associations like the Gemologists ( Jewellery) Association of India has been holding press conferences protesting against some taxes and new rules being levied on jewellery purchase of over Rs. one lakh.

They such moves are sending Indian buyers to Dubai and Singapore to purchase gold jewellery and big Indian jewelers are also rushing to open franchises and branches abroad.

Recently, the Petroleum Dealers Association of India was also getting ready to go on a flash “no purchase strike” when the Petroleum Minister used his muscle power to discourage this move.

Thus it appears that people at both ends of the spectrum – small traders to large industries are still looking for re assurance that ‘good days are round the corner’.

Hope they hold on to the hope.