Corporate India came out with their expectations from the new government, on back of an overwhelming optimism on industrial growth. The expectations range from promoting innovation, clean energy and scale in manufacturing, while India Inc expects a strong government at the Centre to pushing long pending policy decisions such as foreign direct investment and taxation.
“We believe that, the new Government will take steps and measures to take the growth rates higher on a sustainable basis in the long term. We expect steps to increase public investments and encourage private investments in infrastructure, ensure better Governance, reduce fiscal deficit (including control of wasteful subsidies) and implement structural reforms,” said Dipen Shah, Head-Private Client Group Research at Kotak Securities.
“However, we also feel that, it will take measured steps, rather than taking short term steps, as is being hoped by the market,” Shah added.
“Modi has a proven track-record of governance in Gujarat and people have reposed enormous faith in his leadership. I have little doubt that he will fulfil the aspirations of millions of people,” Hinduja Group Chairman Srichand P Hinduja said, adding Modi’s massive mandate as a vote for stability will put India on the path of high growth.
“The BJP manifesto is holistic and wholesome where vocational education and employment generation is concerned. Developing skills among the youth and employment generation is a virtuous circle and the manifesto has given enough attention to this element. I believe these two points are what the country needs the maximum today,” said Aptech Chief Executive Officer and Managing Director Ninad Karpe.
“I also believe the strong mandate given by the people of India to BJP will further bolster the new government to laying emphasis on developing the human skill infrastructure,” Karpe said.
IT- Nihilent Technologies.
“Quite apart from the euphoria in the stock market is the fervent hope of every thinking person in India that the new cabinet will galvanize the departments of government. The first 100 days will tell if they can get the long stalled power sector on track, if they can put energy security on track, if the useless disputes on gas, oil, coal and mining can be put right, push the tax code simplification, unleash the financial sector,” said Minoo Dastur, Chief Operating Officer and President of Nihilent Technologies.
“We at Suzlon remain confident that the new government will steer our nation into prosperity with good governance and development in the coming period. We believe the BJP led government will provide an environment conducive for growth and investments, with major reforms in infrastructure and renewable energy sector. This is important as India’s economic environment will act as a catalyst in reviving the global economy,” Tulsi Tanti, Chairman of Suzlon Group.
Consumer Electronics and Appliances Manufacturers Association (CEAMA)
“The consumer durable industry looks up to the new government in framing guidelines and initiatives that will pave the way for growth, advance technology and innovation. We further expect a transparent tax policy, and interest rate rationalisation which will lead to competitive level playing opportunities. With the ensuing budget aiming to stabilise the economy, there will be a turnaround in the consumer sentiments. CEAMA foresees an improvement in the industry standards, eradication of grey markets and an overall boost to the sector. The upcoming term will witness a significant increase in foreign investments and further avenues for development,” said Anirudh Dhoot, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA).
Infrastructure build up, a stable and friendly policy framework, managing inflation and enhancing per capita disposable income are some of the immediate priorities for the sector, said Kumar Kandaswami, Senior Director at Deloitte Touche Tohmatsu India.
“Beyond these immediate priorities, which will get attention, I hope something is done on promoting innovation, clean energy and scale in manufacturing. While these changes take time beyond the term of the incoming government, strong, path-breaking initiatives are required to be set in motion to secure the long term future of Indian manufacturing,” Kandaswami added.
“A strong government in the Centre will help in pushing through long pending policy decisions around foreign direct investment, taxation and long term investments,” said Sandeep Ghosh, Chief Executive Officer, Bharti AXA Life Insurance Co.
“It was interesting to see some of the IT stocks taking a dip on the day that Indian stock markets overall scaled unprecedented heights. This indicates countervailing factors at play including the strengthening of the Indian rupee reducing the potential for an easy short-term way of increasing topline through the foreign exchange effect,” Sanjoy Sen, Senior Director, Deloitte India said.
“The overwhelming optimism about expected growth in certain business sectors in India will clearly increase IT/ITES focus on growing in domestic markets. Their international business is also expected to grow, perhaps now in a relatively less uncertain and more supportive domestic environment, as the more mature economies also experience economic growth and revival,” Sen added.
Retail and consumer biz sector
Gaurav Gupta, Senior Director, Deloitte in India, has mentioned the priorities and expectations from the new government, with respect to retail and consumer business sector.
“Given that the flavour in this election seems to be better governance and economic development, people would expect the new stable government to implement its reform agenda that will benefit the consumer business and retail sector in various ways including improved consumer and business confidence, better infrastructure development, containing inflation and interest costs and better governance, that makes it easy for people to do business,'' he said.
Stating that a lot of discussion has happened on retail FDI, ``it is only one component of the growth story. A stable government will give confidence to international and local firms to make investments tied to the unquestionable long term growth story of India,''he said.
The challenge for the new government would be to move quickly on some of these aspects and implement a framework that could lead to more inclusive growth, increasing the overall potential for companies in the consumer business and retail sector, he added.
Stage set for robust bull run for next couple of years - K Sandeep Nayak - ED & CEO - Centrum Broking Ltd
The decisive mandate by the people of India, will pave the way for a conducive policy environment, leading to the resurrection of growth in the economy over the next few years. FII and FDI investments should accelerate setting the stage for a robust bull run for the next couple of years. The one year target for the Sensex stands at 27,000 to 30,000 which at the lower end translates to 15xCY15 EPS and at the higher end 16.7xCY 15EPS of Rs.1800 (Bloomberg consensus EPS for CY15).
India Electronics and Semiconductor Association (IESA)
“We envisage encouragement to the industry and focus on building fab units and electronic manufacturing clusters with an investment potential of over Rs 75,000 crore in short term and cumulatively employing 28 million people by building local eco system within the next 10 years,”. Ashok Chandak, Chairman, IESA.
Debt, equity markets
“Clear majority would boost sentiments and would have ripple down effect on the economy over the short term. Post initial euphoria it is the policy measures which would have real impact on the economy. For the bond market the budget would become crucial as the fiscal deficit number would actually indicate if there would be any additional govt. borrowing in the current fiscal compared to the one indicated in vote-on-account budget,” said Rajesh Iyer, Head-Investments and Family Office, Kotak Wealth Management.
“Clear mandate would provide room for significant reforms and a broad based rerating in the markets. Continue to be bullish with scope for Mid-caps and small caps to provide significant outperformance as investors start looking beyond large caps for alpha,” Iyer added.
Madhavan Menon, Managing Director, Thomas Cook (India) Ltd., said, “The new government’s pro-tourism stance is indeed welcome and its leaders recognising the powerful role of tourism in employment generation and as a growth driver, augurs well for the sector as a whole. We are hopeful of prioritization towards key issues like safety and infrastructure; also swift implementation of the electronic travel authorization/e-visa. Political stability coupled with focus on economic growth and social development will generate increased leisure and travel business opportunities, vital for the Travel & Tourism industry. Transport especially air travel will see positive impact and we are optimistic that it will open new avenues both within India and overseas.”
With the stable Government now a certainty, it is anticipated that they would work towards re-igniting the Investment cycle which is critical for revival of growth in the manufacturing sector in India - combined with a stabler and non-disruptive fiscal regime, this could once again get India into focus amongst global equity and strategic investors,” said Sanjeev Krishan, leader private equity, PwC India.
"With a strong government being voted, I see a new resurgent india emerging which will be the apple of the world in the next few years. We have a leader who has risen from the ground, India too will now raise from the ground. I expect greater fiscal control and drop in inflation, increase in job creation and lastly, India Shining again," said Pramoud Rao, MD, Zicom.
Mohit Goel, CEO, Omaxe Ltd
“The year 2013 was not so encouraging for the Delhi-NCR real estate market. High inflation and interest rate alongside policy uncertainty played a role in both consumers and investors staying away from the market. However, now with the election results out and the promise of a stable government a reality, I am optimistic that the scenario will improve for the real estate sector,” Mohit Goel, CEO, Omaxe Limited
“Domestic and foreign investor sentiments will benefit along with improving macroeconomic indicators and global economy. We expect the Government to take cognizance of the long-pending demand of the real estate sector like industry status, incentive for affordable housing and enhanced tax reliefs for homebuyers,” Goel added.
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