NCM-MAY 2014

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Editorial
7
Industry's Expectations from the New Govt. Are Too High
Aeon Chemicals (p103)
Amco Dyeing (p103)
Azure Fabrics Pvt. Ltd. (p103)
BM Impex (p104)
BK Knitfab (p12)
Chemidyes (India) Corporation (104)
Colorant Limited (III Cover)
Colourtex Pvt. Ltd. (p9)
gangahemic@yahoo.com (104)
Inter Continent Chemical (India) Ltd. (I Cover)
Inter Continental Industries (p5)
Jay Ambey Textile Processors (p104)
Jay Chemical Industries (IV Cover)
Jyoti Laboratories (p102)
Kemcol Product (104)
Leo Rubber Industries (p103)
LS Auxichem Pvt. Ltd. (p11)
Kunal Organics Pvt. Ltd. (II Cover)
Mafatlal Food Products Pvt. Ltd. (p103)
Meghmani Dyes & Intermediates Ltd. (p6)
Rajvee Industries (p99)
Supertex-Sarex Overseas (p10)
Veeraj Associates (p104)
A recent survey by the Associated Chambers of Commerce and Industry of
India (ASSOCHAM), involving nearly 450 CEOs from different sectors and
regions, has revealed that India Inc.'s expectations from the new government
are unprecedented at least in the last 20 years. These expectations range from
revival of economic growth to fixing inflation and bringing down interest rates
and unemployment within few months from the day our new Prime Minister
takes charge.
Experts believe that the Indian economy is riddled with key problems that range
from huge fiscal deficit, persistently high level of inflation, slow growth, and
shrinking industrial output. The most important economic indicator requiring
immediate action will be inflation. There are other issues also related with
infrastructure, security, foreign policy, corruption and, law & order that need
equally decisive and quuick actions.
The steep rise in the stock markets is perhaps a very strong proof of this
soaring expectation level among different segments of the economy- stock
markets, industry, trade, multilateral institutions, foreign investors and even
various diplomatic missions as they would like to reinforce their economic agenda
with India.
Foreign investors have pumped in around $5 billion in the share market and we
are already seeing the impact of that money. They hope that the new government
will be investor friendly and boost the economic activity. Both Sensex and Nifty
are touching newer heights everyday, despite the fact that nothing has changed
fundamentally for Indias economy, only goes to indicate that India Inc.'s crazy
high expectations from the new dispensation in Delhi. The rupee has started
appreciating which may not be a good sign for those who are dependent on
exports.
More than the government, a lot will also depend on how global factors play out.
Certain other policy issues like the environmental ones relating to mining etc.
would also have an impact. It will be too much to expect that the new government
is going to change something substantially or turn the economy around on its
head. There cannot be a sudden spike in growth or control on inflation due to the
new government.
Last but not the least, all the above expectations are based on India Inc.'s key
assumption that Narendra Modi will be the new prime minister and he will be in
a position to provide a stable, efficient and strong forward-looking leadership
that is primarily what India desperately needs today. What happens if this
assumption - though realistic and widely accepted - itself turns out to be wrong.
Because in politics, anything can happen. No one ever thinks it will until it does.
Best of luck to Mr. Modi, in advance.