India Inc not pleased with pace of economic reforms
The political confidence index has risen for the third consecutive quarter to its highest level till date. But India Inc doesn’t seem too pleased with the pace of economic reforms.
By Bakul Chugan, TNN |
The finance minister would certainly approve of this, as would the leading lights of the ruling alliance at the Centre: the political confidence index (PCI) has risen for the third consecutive quarter, increasing sharply by 5.2 points since the previous quarter to 127.7 ��� its highest level till date. The PCI reflects India Inc���s perception about the government���s ability to manage various economic issues.
In the latest round of the survey, while Corporate India has approved of the government���s ability to manage inflation, unemployment and maintaining a favourable political climate, it seems to be concerned about public finances and the future direction of economic reforms. The industry also approves of the government���s efforts in managing the rupee-dollar exchange rates and boosting India���s external trade ties.
Surprisingly, however, respondents in the latest round of the survey do not appear to be too happy with the pace of economic growth ��� the number of respondents who are positive about this factor has fallen by 0.3 points.
India Inc���s discontentment with the government on a regional level is also evident. While the government has once again managed to please industry captains in North India, their counterparts in the eastern and southern parts of the country are far from satisfied.
The regional PCI for East India ��� which is already the lowest among all four regions ��� has moved down further by 2.3 points, while the PCI in South India is down by 7.1 points.
This is a clear signal for the government to divert its attention away from its all-time favourites (the North and West) to other parts of the country.
In yet another surprising move, there has been a sea change in the attitude of public sector enterprises (PSEs) this time round. Until the previous round of the survey, corporate honchos in the private sector were more confident about the government���s machinery and its policies, but there has been a complete reversal in this approach in the current round.
PSEs now appear to be more convinced about the government, with a marked improvement in their PCI level by 38.3 points to 148.3, which is way higher than the PCI level of the private sector.
A turnaround within the private sector is also clearly visible in the current round, with a higher degree of optimism being shown by private and public limited companies, compared to proprietary/partnership businesses in the previous quarters.
The current round of the survey has also witnessed an increase in the PCI level of companies which have a turnover of less than Rs 10 crore. However, larger-sized companies, with turnover of Rs 100-500 crore, are less enthusiastic, with their conviction levels falling on all parameters vis-��-vis the previous round.
On the sectoral front, capital goods and consumer durables continue to remain upbeat, while services and intermediaries maintain their slow march.
Hence, while an improvement in external trade negotiations in light of India-China relations has helped to build a positive image for the government, regional disparity and the lethargic progress of essential reforms put a question mark on the government���s administrative efforts.
With general elections due next year, the government is expected to tighten its belt in the near future to ensure all-round approval of its policies.
In the latest round of the survey, while Corporate India has approved of the government���s ability to manage inflation, unemployment and maintaining a favourable political climate, it seems to be concerned about public finances and the future direction of economic reforms. The industry also approves of the government���s efforts in managing the rupee-dollar exchange rates and boosting India���s external trade ties.
Surprisingly, however, respondents in the latest round of the survey do not appear to be too happy with the pace of economic growth ��� the number of respondents who are positive about this factor has fallen by 0.3 points.
India Inc���s discontentment with the government on a regional level is also evident. While the government has once again managed to please industry captains in North India, their counterparts in the eastern and southern parts of the country are far from satisfied.
The regional PCI for East India ��� which is already the lowest among all four regions ��� has moved down further by 2.3 points, while the PCI in South India is down by 7.1 points.
This is a clear signal for the government to divert its attention away from its all-time favourites (the North and West) to other parts of the country.
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In yet another surprising move, there has been a sea change in the attitude of public sector enterprises (PSEs) this time round. Until the previous round of the survey, corporate honchos in the private sector were more confident about the government���s machinery and its policies, but there has been a complete reversal in this approach in the current round.
PSEs now appear to be more convinced about the government, with a marked improvement in their PCI level by 38.3 points to 148.3, which is way higher than the PCI level of the private sector.
A turnaround within the private sector is also clearly visible in the current round, with a higher degree of optimism being shown by private and public limited companies, compared to proprietary/partnership businesses in the previous quarters.
The current round of the survey has also witnessed an increase in the PCI level of companies which have a turnover of less than Rs 10 crore. However, larger-sized companies, with turnover of Rs 100-500 crore, are less enthusiastic, with their conviction levels falling on all parameters vis-��-vis the previous round.
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On the sectoral front, capital goods and consumer durables continue to remain upbeat, while services and intermediaries maintain their slow march.
Hence, while an improvement in external trade negotiations in light of India-China relations has helped to build a positive image for the government, regional disparity and the lethargic progress of essential reforms put a question mark on the government���s administrative efforts.
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With general elections due next year, the government is expected to tighten its belt in the near future to ensure all-round approval of its policies.
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