With the NDA government returning to power with a thumping majority, India Inc took to Twitter for a victory lap. Several industrialists including Adi Godrej, Anand Mahindra, Sunil Mittal, Anil Agarwal, Harsh Goenka and Uday Kotak hailed the win for policy continuity, while it even embodied excitement and promise of India emerging as a superpower for some.
At $2.6 trillion, India may emerge as the world's fifth largest economy eclipsing the UK, but the chasm is wide (China and the US are over $10 trillion economies) and the country needs to grow above 11 per cent against the current run-rate of 7 per cent. If the December quarter's lower-than-expected 6.6 per cent GDP growth rate continues, India might find itself on a sticky wicket.
But corporate honchos aren't losing hope. Calling it a time for transformation, Asia's richest banker Uday Kotak said, "Time for deep reform. I dream of us as a global superpower in my lifetime," while Anand Mahindra hailed Modi as the most powerful, democratically elected global leader. Thursday's win also gives enough ammunition to investors and economists, who have been batting for structural reforms including land and labour laws.
“A strong and stable government with a fresh mandate will be well placed to give the reforms agenda an urgent push to provide the much-needed impetus to investor confidence especially given the current state of the world economy,” said Sunil Bharti Mittal, chairman, Bharti Enterprises.
Industry bodies like the Confederation of Indian Industries (CII) also hailed the verdict and the government's efforts on weeding out corruption. “Transparency and rule of law while weeding out corruption has been the main pillar of the Government in the last five years, delivering phenomenal results for industry,” said Vikram Kirloskar, president, CII.
Meanwhile, Adi Godrej sent a gentle reminder to the next Finance Minister on corporate tax cuts to attract investments. "The government here, in fact, had promised that corporate tax would be brought down to 25 per cent. They have done it for smaller companies but they haven't done it for larger companies," he reasoned.
Ratings agency Crisil, however, is less hopeful and concluded that though private investments will inch up in select sectors, a material change in the private capex cycle was unlikely this fiscal due to ongoing deleveraging. In the absence of fresh investments, unemployment may continue to haunt policymakers.
While Harsh Goenka hoped the economy and investments would boom, Vedanta Resources chairman Anil Agarwal believed that Modi's vision would lead to a leap in India's growth. Essel Group chairman Subhash Chandra said Modi's win was a victory for the country as well as the party. According to Arvind Panagariya, former vice chairman, Niti Aayog, "it is time for bold reforms”. “The government should create a healthy ecosystem for business and entrepreneurs should take responsibility to create high-productivity jobs," he tweeted.
Amid the agrarian distress, the Rs 75,000-crore direct income support announced in February may cheer farmers, but the NDA government has to break a sweat to raise the cash.