Slow reforms a concern but India Inc remains bullish

Report card of the Narendra Modi-led central government for the first six months, on the basis of ratings by top CEOs*, under key parameters

In the first six months since taking charge, the Narendra Modi-led government at the Centre has done enough to excite Indian industry, even as a slow pace of economic reforms during this period remains a cause for concern. Capturing the mind space of people has been one of the biggest achievements of the government, which has mostly come across as a purposeful one so far. The idea seen as the most promising is Modi's 'Make in India' pitch to promote manufacturing in the country.

It might not be possible to gauge an establishment's full potential in only six months but an early assessment by some of the top corporate leaders surely indicates they are bullish. At least five respondents in a Business Standard survey among chief executives of 22 prominent companies operating in India, including multinationals, have given the government a rating of nine on 10 for its overall performance. These CEOs, whose identities are not disclosed, are from top companies in sectors ranging from information technology to finance & banking, e-commerce, healthcare, automobiles, consumer durables, audit, education, infrastructure, electricals and food & beverages.

Of the 25 CEOs to whom Business Standard emailed questionnaires, 22 reverted with what they thought were the biggest ideas, strengths and weaknesses of this government in the first six months. They were given six measures to choose from in each of these categories. These respondents also rated the Modi regime for its overall performance and economic policies on a scale of one to 10, where one represented the worst ranking and 10 the best. For overall performance, while five of the 22 CEOs gave the government nine points (the highest score in this survey), the average score was 7.3. Only two respondents gave it five points (lowest in this survey).

The ratings, though, were less encouraging on the economic policy front. Only three of the 22 (a seventh of the total) gave the government nine points (the highest), while seven (a third of the respondents) gave four or five. The average score for economic policies was 6.6.

Among the ideas that appeared to have made the biggest impact was Modi's 'Make In India' pitch, made before a line-up of corporate honchos recently. This was ranked the government's best idea by more than half the repondents (12 CEOs). The Swachch Bharat Abhiyan, the cleanliness drive initiated by Modi and then popularised through a chain of celebrities (like the famous ice-bucket challenge), and the Digital India campaign to usher in transparent governance and ease of living, also struck a chord with India Inc. These programmes were seen as the brightest ideas by four CEOs each. The plan to do away with the Planning Commission got the top rating from only two respondents.

The Pradhan Mantri Jan Dhan Yojana and the plan for smart cities - two other popular ideas in the Modi government - were not ranked as best by any of the 22 CEOs surveyed.

Of the six strengths given as options, as many as eight CEOs (more than a third of the total) thought capturing people's mind space was the greatest so far for the government. Coming across as a purposeful government came a close second, with five respondents backing it. The Modi government's foreign policy (US President Barack Obama coming as chief guest for the Republic Day being a prominent initiative) and effective communication (Modi's regular engagement on social media to reach out to the masses being a significant step) were rated as the biggest strength by four CEOs each. Only one respondent saw energy-pricing reform as the best.

While a slow pace of reforms was considered the government's biggest weakness by as many as nine CEOs, delay in appointments and ad hoc sackings came a distant second, with five CEOs calling these the most striking weakness. Centralised governance, encouraging personality cult and not adhering to the mantra of maximum governance and minimum government were been seen as the biggest drawbacks by two respondents each. Only one CEO said this government's biggest failure was not taking minorities on board.

 

Though every CEO was asked to list three biggest ideas, strengths and weaknesses, one declined to point out any weakness, saying those looking at drawbacks were still "focused on the Nehruvian legacy". He was one of those who gave a rating of nine for both overall performance of the government and its economic policies. Another CEO listed only one drawback - centralised governance. He gave 9 points for overall performance and eight for economic policies. Two CEOs listed only one strength each - foreign policy.
A well-known IT company CEO, who gave 7.5 points for economic reforms, said the new government had got little time before coming out with its first Budget. "Six months is not long enough to complete evaluation of the economic policies."

Another CEO, bullish on this government, said: "This is the brightest period we have seen in the post-Independence India after the period of P V Narasimha Rao and A B Vajpayee."