Despite rate cut, the low morale spills over

Even the 10 chandeliers and 12 spotlights that hung from the ceiling of Taj Palace’s ballroom this morning could not completely light up the faces of the few hundred who sat under these, as the Reserve Bank of India’s decision to cut the repo rate by 50 basis points was announced.

The crowd at the Confed-eration of Indian Industry (CII)’s annual general meeting and national conference 2012 merely issued a round of half-hearted applause, though finance minister Pranab Mukherjee had earlier hinted a rate cut was in the offing in the next “half an hour”.

Captains of industry, including the likes of Bajaj Group patriarch Rahul Bajaj, Godrej Group chairman Adi Godrej, Biocon chairman and managing director Kiran Mazumdar-Shaw and Tata Steel vice-chairman B Muthuraman, subsequently began expressing their appreciation of the much-awaited rate cut to the media waiting on the sidelines.

Yet, behind their optimistic facade remained a deep anguish about, and a clear realisation of the fact that, the government’s inability to push through key reforms and its compulsion to adhere to coalition partners would continue to adversely impact Indian industry. This was the irony at a meeting that had ‘Getting Growth Back: Government-Industry Partnership’ as its primary focus.

Rushing into a closed-door CII meeting, Rahul Bajaj said though the government wanted partnership with industry, whether public-private-partnership or otherwise, “actually the government is not functioning….That is the real problem and that is what we are unhappy about.” He curtly labelled the policy paralysis that the government currently found itself suffering from as “unfortunate”.

Kiran Mazumdar-Shaw was much sharper. “Where are the enabling platforms for public-private partnership? I really don’t see these. Unless you’re serious about it, unless you enunciate policies that really allow this to happen, it’s not going to happen,” she said. The larger problem, she felt, was the political parties that made up the ruling coalition weren’t on the same page. “I think a coalition should be of like-minded parties, not parties which are fragmented and pulling in different directions,” Mazumdar-Shaw added.

Though both Adi Godrej and B Muthuraman insisted the government-industry partnership was as strong as ever, the latter conceded the political process required for reforms was “not moving forward very well.” As a result, “industry is not doing well,” he added. Possibly, as far as India Inc is concerned, a case of painful karma for the government’s steadfast adherence to coalition dharma.