Daily Management Review

Business Leaders Want More From Indian Government As India's Economy Reels From Recent Reforms


10/08/2017




At the World Economic Forum's summit here in the Indian capital in New Delhi, executives across India Inc voiced broad-based optimism about the country's economic growth.
 
And the message that it's time for more game-changing reforms was sent to the government by all of that positivity hand-in-hand.
 
India’s economy is feeling the sting, as a series of dramatic policies expected to transform the entire culture of doing business is embarked upon by the world's largest democracy.
The gross domestic product growth was pushed to a three-year low in the April-June quarter ahead of July's Goods and Services Tax (GST) implementation and the ongoing pressure has been spurred by demonetization and supply chain disruption before that incident. Sluggish private investment and weak job creation have further compounded the situation.
 
"We're going through the pain, we'll see whether it takes one or three quarters," said Sanjiv Bajaj, managing director at Bajaj Finserv, which is a financial services firm part of the larger Bajaj conglomerate. "The impact of the net change will be significantly positive. A year down the line, we'll be talking with a very positive feel than where we are today."
 
He expects GDP to improve as early as the second half of this year, said Adi Godrej, chairman of The Godrej Group, a corporation with interests in real-estate, household items and chemicals.
 
"This whole question mark about the Indian economy came from weak June growth," he explained. "In the manufacturing sector, the new GST rate was less than the combination of earlier excises, so obviously there was a lower destocking of those items and lower clearance, which affected GDP of that month."
 
He said that Godrej's various companies will clock in higher sales in the coming months and added that won't be the case going forward.
 
Shobana Kamineni, president of the Confederation of Indian Industry said that GST can ultimately boost economic growth. "What's going to happen is a reorganization of the entire supply chain network — consolidation of formal retail, movement of goods — the entire transition is for the future, and that's where GDP will kick up at least two points."
 
For finally unleashing big-bang reforms deemed crucial for modernization, Prime Minister Narendra Modi’s administration was widely praised throughout this week's two-day India Summit. New Delhi introduced a new bankruptcy law late last year to resolve the nation's $150 billion bad debt overhang as it is also cleaning up debt-saddled public sector banks aside form GST. The government says it says the downturn couldn't be avoided and is cognizant of the economic slowdown.
 
"When you're introducing radical changes, you have to expect unintended consequences of all kinds," Sanjeev Sanyal, principal economic advisor in the department of economic affairs at India's finance ministry, said.
 
"The only way to introduce something like a banking sector cleanup or GST was to not keep thinking about it but actually do it and fix it along the way — sort of a feedback loop approach. This may look awkward in the short term, but it is the only real way you can introduce major changes in a country like India."
 
(Source:www.cnbc.com)






Science & Technology

Large U.S. Study Finds Detection Of Irregular Heart Beat By Apple Watch

Apple to present Netflix competitor at the end of March

Live Human Under-Skin Chip Implantation Takes Place At Barcelona

IDC: Wearable tech gadgets market is booming

Second Patient In 12 Years Becomes HIV Free By Bone Marrow Transplantation

Car-Sharing Platforms Could hold The Key To 5G & Auto Industry Collaboration

Bezos tells about his space plans

Fast Company: Apple isn't the most innovative anymore

U.S. Space Program Could Be Delayed Due To SpaceX, Boeing Design Risks: Reuters

What trends will be affecting the health sector in the coming years?

World Politics

World & Politics

China's expansion into Europe: Italy’s ports are next

US watchdog is accused of violating aircraft certification process

Large Section Of Citizens Unhappy With Public Services & Benefits: OECD Survey

Largest companies reveal volumes of plastic produced by them

US Warning To Germany About Intelligence Sharing Over Huawei Ban

Mercer reveals the world’s safest cities

No vaccinations, no school: Italy’s new law

Why the new Aachen Treaty cannot save France-Germany relation