B U S I N E S S

India Inc frames agenda for new govt
New Delhi, May 19
Buoyed by the mandate for Narendra Modi led NDA, India Inc has prepared a wish list and is also amenable to unpalatable decisions to ensure long-term growth. Post the general council meeting, Ajay Shriram, president, CII, said industry was in a buoyant mood post the election results.

Markets bullish on Modi govt
New Delhi, May 19
As the indices traced new highs and the rupee hit a 11-month high, markets are very bullish on the prospects of the Narendra Modi government providing growth to the economy and have even likened it to a change of management in a company which can lead to a turnaround.

Change policies to ease business in India: CII to govt
New Delhi, May 19
Industry body CII, along with the research firm KPMG, has suggested that the government must change policies to ease doing business in India. The report titled ‘Ease of doing business in India’, in partnership with KPMG, India, says despite being one of the fastest growing economies in the world and potential investment hub, India lags behind in terms of ease of doing business.

PMEAC head Rangarajan submits resignation to PM
New Delhi, May 19
Chairman of the Economic Advisory Council to the Prime Minister (PMEAC) Chakravarthi Rangarajan has resigned following the defeat of the Congress-led UPA in the general elections. “He (Rangarajan) has tendered his resignation. He will be here this month,” an official spokesperson of the PMEAC said today.

India Inc frames agenda for new govt
Sanjeev Sharma
Tribune News Service

New Delhi, May 19
Buoyed by the mandate for Narendra Modi led NDA, India Inc has prepared a wish list and is also amenable to unpalatable decisions to ensure long-term growth. Post the general council meeting, Ajay Shriram, president, CII, said industry was in a buoyant mood post the election results.

While the primary aim would be to revive the economy, he said the CII did not believe that this government should be given something like a very short period agenda.

“In fact, we are keen that a vision for economic development, along with targets for growth be set for the next three to five years at least. The GDP growth could be targeted to rise to 6.5 per cent initially, going up to 8.5 per cent by 2016-17,” he said.

Shriram said the economy was beset with complex problems and trying to find short term solutions to long-term issue would be counterproductive. “The new government might have to take hard decisions, some of which might not be very palatable to industry in the short term. However, as long as these are aimed at curing the economy of its present ailments, the CII would be firmly with the government on these issues,” he said

He said a huge thrust had to be on implementation since that yielded results most visibly. Then there were irritants such as the Land Acquisition Act and the new Companies Act which needed comprehensive overhaul to make them practical in the context of realities today.

Ficci congratulated PM-elect Narendra Modi for the overwhelming mandate received from the largest elections ever held.

“We look forward to renewed trust, sound governance and decisive actions as enabling factors to address needs and aspirations of both our entrepreneurs and youth,” said Sidharth Birla, president, FICCI.

Birla said even as the Union Budget was a ripe opportunity to spell out key policies, fiscal imperatives and plans for implementation in the interim weeks could be rolled out. Ficci hopes to see measures on inflation mitigation and restoring confidence, besides road maps on job creation and national competitiveness.

Ficci assured the government of participation in developing positive policies leading to job creation and growth across regions and sectors— particularly manufacturing.

Assocham Rana Kapoor emphasised that the industry and financial markets had high expectations from Modi, “We need not always talk in terms of specific and micro issues as to how many subsidised LPG

cylinders should the government give or how frequently the government should raise the diesel prices. We should leave the micro-management to the government,” he said.

He said there was no conflict between the interests of industry and common people. “We in the industry would rather expect the incoming government to focus on financial discipline (how it achieves should be left to it) and first rate governance efficiency in terms of reaching out to both citizens and industry. There is no conflict of interests between the rights of common citizens and the industry, which unfortunately has been projected to be so,” he added.

Markets bullish on Modi govt
Sanjeev Sharma
Tribune News Service

New Delhi, May 19
As the indices traced new highs and the rupee hit a 11-month high, markets are very bullish on the prospects of the Narendra Modi government providing growth to the economy and have even likened it to a change of management in a company which can lead to a turnaround. Extending gains for the third day, the benchmark Sensex jumped 241 points to end at a new closing peak of 24,363 as foreign inflows continue in Asia’s best performing market.

The rupee hit a 11-month high of 58.37 to the dollar on positive sentiments and increased flows. IT stocks saw massive selling pressure today, falling as much as 6 per cent after the rupee surged.

Market participants are bullish on the future trajectory. Daljeet S Kohli, head of the Research IndiaNivesh Securities, said in a note that while legislative reforms and policy corrections might take long time, any quick announcements on execution and administrative side could boost investor’s confidence. Since the market is likely to give long rope to this government as it perceives the ruling party to be pro growth.

“Therefore market may keep their upward momentum for the next few months. However, neither the country nor the markets can run on hope for a long time. Real action has to follow post the hype,” he said.

Analysts said the change in government like a change of management could alter fortunes. Motilal Oswal Securities said in a note that a change in management and its impact on underlying performance was as relevant to politics and overall economy as it was to a company or business.

“We believe a change in the Indian government, which under the UPA rule was marked by poor governance, widespread corruption and policy paralysis bodes well for the market. Capital market and corporate India have built huge expectation on the back of a clear majority to the BJP and expects Modi to repeat his performance in Gujarat at the national level,” it said.

Deutsche Bank, in a note, said the first on the to-do list, as widely expected, was to get project clearance and implementation expedited. Reducing regulatory uncertainty and simplifying procedures for obtaining clearances would be a priority. It would also help boost investor confidence appreciably, if the government could set up a single window clearance facility for investment related to infrastructure projects.

The note said soon after taking office, the new government would have to present its first full-fledged budget in July. The budget document should give the right signal with respect to subsidy policy and overall fiscal stance. The budget may also benefit from articulating appropriate contingencies for a probable disruption to food production this year.

The trend

• Markets have likened it to change in management of companies which caused a turnaround
• The rupee hit a 11-month high of 58.37 to the dollar on positive sentiments and increased flows
• IT stocks saw massive selling pressure today, falling as much as 6 per cent after the rupee surged

Change policies to ease business in India: CII to govt
Girja Shankar Kaura
Tribune News Service

New Delhi, May 19
Industry body CII, along with the research firm KPMG, has suggested that the government must change policies to ease doing business in India. The report titled ‘Ease of doing business in India’, in partnership with KPMG, India, says despite being one of the fastest growing economies in the world and potential investment hub, India lags behind in terms of ease of doing business.

In its suggestion, the reports of the two organisations said there was a clear need to make it easier to do business in India, pointing out that the improvement in the business environment would spur growth and generate employment for millions across the country.

The report identifies key areas for reform which will enable doing business in India, including setting up of business, land acquisition, taxation and contract enforcement.

According to the report, despite two decades of economic reforms, India continues to falter on various sub-indices such as starting a business, dealing with construction permits, getting electricity, registering property, paying taxes, trading across border, enforcing contracts or resolving insolvency.

In fact, the latest rankings place India at the 134th position among 185 countries, lower than all its BRIC counterparts. Therefore, there is an urgency to focus on improving the business environment and arrest the decline in relative performance against various determinants of investment attractiveness.

Chandrajit Banerjee, Director General, CII, said, “The CII hopes that the findings of the report would help bring the issues to the fore and also serve as a reference point for the imminent need to pursue reforms in business practices and processes. The Indian industry hopes that the new government would accord due importance to this extremely important and urgent agenda that would help churn the wheels of investment and growth.”

The report is based on a survey conducted among Indian industry, followed with extensive primary and secondary research to assess the prevailing business regulatory environment in the country. Key issues highlighted include lack of an effective land acquisition process, unfavorable taxation regime, and high cost of starting a business.

PMEAC head Rangarajan submits resignation to PM

New Delhi, May 19
Chairman of the Economic Advisory Council to the Prime Minister (PMEAC) Chakravarthi Rangarajan has resigned following the defeat of the Congress-led UPA in the general elections. “He (Rangarajan) has tendered his resignation. He will be here this month,” an official spokesperson of the PMEAC said today.

The PMEAC also has Saumitra Chaudhuri, V S Vyas, Pulin B Nayak and Dilip M Nachane as members. Its term is parallel to that of the prime minister. Manmohan Singh resigned as prime minister on May 17.

The official said three of the four members of the advisory body have sent their resignations to the prime minister.

“I have told all members to send their resignations to the prime minister. Vyas, Chaudhuri and Nachane have send theirs, while Nayak will be sending soon,” the official said.

Chaudhuri is also a member of the Planning Commission. The advisory council was set up with a view to provide a sounding board for inculcating awareness in government on different points of view on key economic issues. — PTI

Major exit

The PMEAC also has Saumitra Chaudhuri, V S Vyas, Pulin B Nayak and Dilip M Nachane as members. Its term is parallel to that of the prime minister. Official sources say three of the four members of the advisory body have sent their resignations to the prime minister