Goldman Sachs, Citi doubt Govt's ability to push ahead reforms
Contrary to India Inc's expectations, global investment banking giants Goldman Sachs and Citigroup have expressed doubts over the UPA government's ability to push ahead with a full fledged reforms process.
By PTI |
NEW DELHI: Contrary to India Inc's expectations, global investment banking giants Goldman Sachs and Citigroup have expressed doubts over the UPA government's ability to push ahead with a full fledged reforms process even though the ruling coalition no longer relies on the left.
Noting that the government, which won the trust vote in the Lok Sabha last evening, would now have an opportunity to pursue stalled reforms, Goldman Sachs pointed out that the administration would have to deal with several difficulties in carrying out the process.
"However, if it is to introduce reforms successfully, the government will have to deal with several difficulties. Five factors impede its ability to enact reforms successfully," Goldman Sachs said in the report.
The report said that the little time available for the government to complete its full term, need to placate and meet demands of allies who supported the regime in the confidence motion would create roadblocks in the reforms process.
"Third, the pressing priority to win the next General Elections and the populism that may entail. Fourth, the acrimonious discussions that took place between UPA and the opposition, especially the Bharatiya Janata Party, could lead to difficulties in passage of important bills.
"Lastly, the lack of self-confidence that the government has shown so far in pressing ahead with reforms. Given these difficulties, we think it may be able to implement only a fraction of the reforms mentioned above," Goldman Sachs said.
In a separate report, global financial services major Citigroup said that it remains to be seen whether UPA would be able to put reforms on the fast track or not.
"But whether it will be able to put reforms on the fast track and clear all the pending legislation is not a given as especially in politics, there is no free lunch, " Citigroup economist Rohini Malkani said in a report.
Noting that the government, which won the trust vote in the Lok Sabha last evening, would now have an opportunity to pursue stalled reforms, Goldman Sachs pointed out that the administration would have to deal with several difficulties in carrying out the process.
"However, if it is to introduce reforms successfully, the government will have to deal with several difficulties. Five factors impede its ability to enact reforms successfully," Goldman Sachs said in the report.
The report said that the little time available for the government to complete its full term, need to placate and meet demands of allies who supported the regime in the confidence motion would create roadblocks in the reforms process.
"Third, the pressing priority to win the next General Elections and the populism that may entail. Fourth, the acrimonious discussions that took place between UPA and the opposition, especially the Bharatiya Janata Party, could lead to difficulties in passage of important bills.
"Lastly, the lack of self-confidence that the government has shown so far in pressing ahead with reforms. Given these difficulties, we think it may be able to implement only a fraction of the reforms mentioned above," Goldman Sachs said.
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In a separate report, global financial services major Citigroup said that it remains to be seen whether UPA would be able to put reforms on the fast track or not.
"But whether it will be able to put reforms on the fast track and clear all the pending legislation is not a given as especially in politics, there is no free lunch, " Citigroup economist Rohini Malkani said in a report.
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