Two days ago, HDFC Chairman Deepak Parekh, who has often donned the cap of captain of Indian industry, expressed some frank opinions of Modi’s performance in the last nine months as PM : he said impatience has begun creeping in among business men as nothing on the ground has changed. There has been a lot of talk about the ‘ease of doing business’ but there is no evidence of it happening yet. (He said HDFC itself has experienced this first hand since it has some projects on the anvil).
“There is still optimism about change but it is not translating into revenues for business” Parekh rued.
The same sentiment but in different words and actions has been expressed by Finance and Business internationally too. Last month an Analyst had commented that the international community is still on ‘wait and watch’ stance on the Indian situation. International funds seem poised to, but haven’t taken the plunge into investing in India.
Indian and world industries haven’t really given up on Modi but now they are clearly getting impatient with his rhetoric and want some action.
As Business newspaper Mint says in its ‘our view’ columns –
The last time such comments ( expressing impatience) were made to a Prime Minister was in 2011 when a group of industries wrote a letter to Manmohan Singh bemoaning the state of the economy and the short comings of his government. This letter was written six years into Singh’s prime ministership; that was about the time when industry began hoping a change of party in Delhi might prove more beneficial. Parekh’s letter to Modi comes much sooner – just nine months into his governmment.
This impatience is showing because economists and industrialists felt India had been gripped by a policy paralysis for years leaving Indian economy in dire straits. With his huge majority Modi was expected to quickly turn things for the better.
The assessment of his ‘third trimester’ is that his record is ‘mixed’. Some positive steps have been initiated but dynamic reforms as were expected, have not been undertaken.
Causing dismay to observers is how the Govt. is functioning too. Unable to pass key legislations, important bills on insurance, coal mines and changes in the land acquisitions law have been turned into ordinances, creating uncertainty. Even with a strength of 330 members in the Lok Sabha these bills have not been passed since there is no consensus in the Rajya Sabha. And so far there are no signs that the government is willing to call a joint session of Parliament to clear these bills.
On the other hand, there are clear signs that post the Delhi election results, all opposition parties are rejuvenated and emboldened enough to get together and disrupt the functioning of the up coming budget session. Instead of acting as the responsible largest party and being responsible and statesman like, what the BJP is doing is attracting more disharmony with its actions in Bihar where it is trying its best to oppose the Janata Dal (united) from forming the government.
Another factor that is not geing down well with both industrialists and political observors both is that instead of outlining necessary structural changes, porgrams such as Swachh Bharat and Make in India push for industrialists have been launched without careful preparation.
As Anil Ambani pointed out on the sidelines of the Aero show in Banglore ” the rhetoric of make in India is not translating into action where it comes to Indian industries trying to make forays into the defense sector.”
As a journalist points out – the danger before the government is that the subdued optimism being seen now will soon turn into open questioning about its understanding of what India needs.
While campaigning for the 2014 general elections Modi had correctly sensed the mood of the people and also the fact that India is a young, brash and impatient country right now. That is why his tools of modern campaigning like use of multi media succeeded so well.
He needs to understand that the same young country will not show much patience if promises, so liberally made, are not turned into results. Time is running out…
Realistically, this government needs to begin showing its grit and determination right at the budget next week. This is going to be its second budget and therefore has to show the way forward catagorically. It has a very small window of at the most 18 months to carry out some radical structural changes – after that general elections will start looming large again and unpopular and brave decisions will not be taken then.
So tighten your belt Jaitley, it is show time for you now.
To sum it up Mihir S Sharma says it best –
Mihir S. Sharma, says while speaking about his exciting book on Indian Econnomy called “Restart”-
India, today, is democratic; young and angry and demanding; socially confused and diverse; and very poor. These things have never been seen together before. This country needs to go through three transformations at the same time. The first is the demographic transition — a bulge much like the U.S.’s baby boom. The second is to build the infrastructure of a modern economy, with all the stresses and social strains that will cause. And finally, we need a turn towards modernity in our attitudes and preferences and lives. Each of these is difficult; and we have left them all to the last minute.
If we are to take a world view of things and look at such development paradigms in a historical context we shall see that when the western powers got to build their high ways, industries and bridges they were mostly oligarchies, and in the east, like China, they were totalitarian regimes.
In India changes have to be wrought in a vibrant, diverse democratic atmosphere. That makes it a task very challenging at the same time very exciting. Modi just has to hark back on his own promise of – Change that will be all inclusive and for everybody.