A mood of pessimism prevailed at the 84th annual general meeting of the Federation of Indian Chambers of Commerce and Industry (Ficci) on Wednesday, over lack of consensus on economic reforms and absence of any indication of easing tight monetary policy. India Inc suggested more needed to be done if the country had to tackle slowing growth.
At the meeting, most participants said they expected the government to restart the reform process after the Assembly elections. Some complained about the tight liquidity condition, while others said falling inflation would give the Reserve Bank a window to lower rates.
“The political mood is very negative,” said Habil Khorakiwala, Wockhardt chairman. “It has to change because sentiment drives the whole economy, including international interest. Remedial measures are not easy. Let us hope the elections give more stability to the political fragility. With more stability, the government will have the ability to do more reforms,” he said.
Most business captains agreed the political logjam needed to be cleared. “The mood is improving, but we need to work more and remove political logjams. However, I do not see anything happening for the next two months,” Naina Lal Kidwai, country head (India), HSBC, said.
Onkar S Kanwar, chairman and managing director of Apollo Tyres, said there was a need to find ways to get more investments into the country and increase confidence level among investors.
Others saw liquidity crunch and high interest rates as pressing problems that required urgent solutions. C S Nopany, a director with several K K Birla Group companies, said the finance minister had not addressed how he was going to improve liquidity.
Harsh Pati Singhania, managing director of JK Paper, said if the high interest rate regime continued, investments would be far and fewer. “Things are not satisfactory. More action is required from the government,” Singhania said.
Rajan Bharti Mittal, vice-chairman and managing director of Bharti Enterprises, said if key reforms did not take place, it would translate into a loss for the nation. Meera Sanyal, who heads the Indian operations of RBS, said not having a consensus on reforms was dangerous.
Arun Jaitley, senior Bharatiya Janata Party leader and leader of the Opposition in the Rajya Sabha, took a dig at the United Progressive Alliance government for failing to carry forward key reforms. Referring to a “policy paralysis” in the government, he said there was a need to crack the pessimistic mood. “Leadership is not the art of waiting for a consensus. However, this leadership is lacking and, therefore, pessimism has set in. The government is in office, but it is not in power,” he said.