Hopes running high among India Inc over re-election

Our Bureau Mumbai | Updated on May 23, 2019 Published on May 23, 2019

A trader offers prayers before entering the Bombay Stock Exchange on Thursday   -  Prashant Nakwe

With stability and continuity, the corporate sector expects reform agenda to be continued

Following the thumping victory of the BJP-led NDA, India Inc’s hopes are soaring, with the business fraternity expecting nothing less than an industrial revolution in the country.

Further, a stable government at the Centre would bring in economic reforms, more jobs, foreign investments and a boost to fintech and start-up ecosystems, it hopes.

$5-trillion economy

To begin with, the industry is expecting the Modi government to hit the ground running, starting with BJP’s own promises made in the election manifesto, and looking into the unfinished agenda of the previous tenure. Further, India inc is expecting the new government to accelerate the pace of economic reforms and make the country a $5-trillion economy. “This colossal verdict is a vote for economic stability and hope for aspirations of young India. It also brings a responsibility on PM Modi’s shoulders to speed up economic reforms to accelerate India’s economic trajectory. We need more FDI to come in more investors and more industry. NDA 2.0 has to roll out the red carpet by improving ease of doing business by enhancing Centre-State coordination through a GST-like council,” Hinduja group Chairman GP Hinduja said.

Economic transformation

Uday Kotak, Managing Director and CEO at Kotak Mahindra Bank said, “As we undergo a significant structural political transformation of India, it is now time for us to focus on the transformation of the Indian economy. It is time for us to defy gravity of normal economics. We need to be really bold in our deep reforms of the financial sector, of the real and social infrastructure, remove a whole host of bottlenecks in different segments of the economy and unleash the economy for significant growth in the years to come. We need to move to double digit growth for our country.” .

Gautam Adani, Chairman, Adani Group said, “Moving into the next level of development requires focus on large scale infrastructure growth, reskilling of workforce and deeper penetration of technology.” .

Bharti Enterprises’ Founder & Chairman Sunil Bharti Mittal was of opinion that “a strong and stable government” will give the reforms agenda an urgent push and ensure that the fruits of the economic momentum continue to reach the poor. Modi’s focus on Digital India will make “India a leader in the digital economy.”

For many head honchos, rekindling the reforms and policies started during the previous five-year tenure should be the key for a brighter and resurgent India.

“The government will now re-ignite its reforms agenda to push growth, tackle critical issues like creating more jobs, usher in more tax-friendly laws, strengthen India’s position in global trade while protecting domestic industry from dumping and create more conducive environment to attract FDI in critical segments like mining and Oil & Gas,” Anil Agarwal, Chairman at Vedanta Resources said.

“Given India’s rich and diverse geology, it is the right time for the country to have a mining revolution,” Agarwal added.

Boost to infrastructure

Sukumar Rajah, Senior Managing Director and Director of Portfolio Management at Franklin Templeton Emerging Markets Equity said, “Modi’s manifesto included a $1.44-trillion boost to infrastructure, a $10.5-billion cash injection into the farming industry. He pledged to double farmers’ incomes by 2022.” .

“He also unveiled plans to continue to simplify the Goods and Services Tax (GST), remove certain products from the list of items subject to the higher tax rate of 28 per cent, and to increase investment in infrastructure, which could introduce new jobs. In our view, policies implemented during his last administration are established enough to withstand any potential short-term challenges,” Rajah added.

Prathap C Reddy, Chairman at Apollo Hospitals Group said,“The clear majority for a second term should give the government the fuel it needs to continue on the path of fiscal transformation and take the country to its rightful place in the global economy.” .

Fintech ecosystem

The fintech sector expects the new government to further strengthen the ecosystem.

“With the consumer in mind, the government should introduce regulations that are flexible in nature and benefit multiple stakeholders. While regulations like sandbox and ‘no-compromise’ approach towards safety will further drive innovation and security in the fintech space, a more market driven approach towards pricing, the timelines to implement the norms and flexibility would be equally important,” Navtej Singh, CEO Digital Business at Hitachi Payment Services said.

Himanshu Pujara, Managing Director at Euronet Services India said, “A right mix of policies, regulation and incentives are required to further the fintech space. The Government thus far has been extremely supportive by promoting the platform for real time and faster payments, creating an environment that has let to huge investments in the fintech space which has allowed mushrooming of several hundreds of start-ups who are enabling innovation. Going forward the Government has to ensure that policy and regulation have a coordinated run with industry requirements and innovation to foster creativity, new investments and secure growth of the sector.”

Investor confidence

A stable government will also result in an increase in confidence of foreign investors.

“The upside of the current administration winning the majority vote and coming back to office for five more years signals political stability, especially important for foreign investors to continue to confidently invest in India via debt or equity structures. It also signals a vote of confidence by the people on the many policy decisions made by the current government such as GST, skills development, and focus on the MSME sector. NBFCs are critical for the growth of the country and easing of stringent rules around co-investment by foreign entities by the new government will provide them with much-needed funding,” Hardika Shah, Founder and CEO at Kinara Capital.

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Published on May 23, 2019
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