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India Inc Hails Modi Victory, Looks For Bold Reforms

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Happy at the clear mandate given by voters to the BJP-led NDA, India Inc exuded confidence that Narendra Modi will initiate bold and decisive policy reforms to promote economic growth.
 
"A clear mandate is positive for India. Ficci hopes that this mandate will help the leadership restore much needed investor confidence, attract higher investments and generate employment, especially in the manufacturing sector," Ficci President Sidharth Birla said.
 
Modi appears all set to be the next Prime Minister with BJP likely to get a majority on its own, as per the results trend since this morning. BJP-led NDA is expected to get over 300 seats in the 16th Lok Sabha elections.
 
Assocham President Rana Kapoor said: "A majority mandate gives hope of a stable government, paving the way for bold and decisive policy reforms. This can herald a sustainable 10 per cent growth of the economy in the next 18-24 months".
 
The nation, Birla said, awaits an era of minimum government and maximum governance.
 
"Industry must be seen as a key factor in the nation's advancement by enabling efficient provision of goods and services and creation of jobs," he added.
 
Welspun Renewables Energy Vice-Chairman Vineet Mittal said: "This is a win for the people of India and demonstrates how young participation can transform the country.
 
"Stable government with clear majority will boost confidence of the industry, global community and foreign investors."
 
More Comments
Harsh Pati Singhania, Director JK Organisation and Vice Chairman & Managing Director JK Paper Ltd
The historic mandate given to BJP led by Shri Narendra Modi, is a mandate for Action.  It clearly signals the nation’s desire for good governance and  development.

We, from the business community, stand to support the new Government in its endeavour to restore economic growth along with job creation and improved prosperity for India’s citizens.  The focus must be on improving Indian Businesses’ competitiveness, especially in the manufacturing sector and making India an easier place to do business in.

To the global community, the message must be that India means business and it is  back on the growth path.

P. Balendran, Vice President, General Motors India
With a new stable government in place, we expect early implementation of second generation economic reforms like GST & DTC and speeding up of stalled infrastructural projects to revive the economy. A clear leadership at the center will give a much needed direction to the economy. Implementation of new labour reforms will lead to creation of jobs, especially in the manufacturing sector,” said P Balendran, Vice President, General Motors India.

Customer sentiment is expected to improve in the medium to long term with a new government at the center. We expect the excise duty cuts to be retained in June’s budget and interest rates to fall or remain at current levels for any chances of recovery for the automobile sector during second half of the year.

Tulsi Tanti, Chairman, Suzlon Group
As we usher in a new progressive era, the SUZLON family extends its heartiest congratulations to Shri. Narendra Modi and his team for their vision and ability to bring in a clear mandate. We at Suzlon remain confident that the new government will steer our nation into prosperity with good governance & development in the coming period.

We believe the BJP led government will provide an environment conducive for growth & investments, with major reforms in infrastructure & renewable energy sector. This is important as India’s economic environment will act as a catalyst in reviving the global economy.  I sincerely extend my best wishes to the new Government

Dr GVK Reddy, Founder Chairman & Managing Director, GVKPIL
The election results reaffirm the country’s faith in democracy. The people’s confidence and mandate for stability has ensured that there will be economical and political stability in times to come.

We are confident that with a strong mandate, the new government will do well and will implement economic policies that benefit the country’s people and its industry.

This will create an environment conducive for growth and ensure prosperity of the nation, thereby fulfilling its enormous potential.

Amber Dubey, Partner & India Head of Aerospace and Defence at KPMG
“Air transport is a critical element of a nation’s infrastructure, enabling global business and tourism.  The new Government is likely to accord high priority to this sector and is expected to make significant corrections in policies, procedures, infrastructure, taxation structure and skill development.” 
 
“The new Government should develop a transparent policy for enhancing bilateral seat quotas.  Quotas shall be linked to objective criteria like investments, incremental traffic, employment and strategic interests of India.” 
 
“The next phase of growth of Indian aviation will be driven by no-frills airports in India’s interiors.  The new Government should focus on enhancing regional connectivity to have an equitable development of air connectivity across the country.” 
 
“The new Government should endeavor to dispel the notion of aviation being a ‘luxury’ product and promote it as a mode of rapid transportation that enhances mobility, tourism, investments and employment.” 
 
“Other key initiatives could be:  abolition of the discriminatory 5/20 rule, privatisation of Air India , rationalization of taxes for MRO and ATF, fast-tracking of stalled PPP airport  projects, creation of an independent ATC organization and flexible use of defense airspace.”
 
Raghu Kumar, Cofounder, RKSV
"After early polls showed that the BJP led NDA government is going to easily get the required 272 votes to win the election and hence, make Narendra Modi India's new Prime Minister, the markets rallied wildly with the Sensex jumping more than a 1000 points in early morning trading before ending the day 250 points up. The fall is most likely due to investors locking in profits after the huge surge in the morning, although it could also have to do with the expectations investors have on how many seats the NDA will actually grab and whether the BJP will, on its own, be able to grab the required 272 seats on its own. 
 
That being said, consolidation is the last thing on the market's mind right now. We can expect the market to be bullish for weeks to come as the market fully digests the implications of a BJP-NDA led government let my Modi. Banking, infra, and retail can expect to see huge rallies through the end of May before consolidation finally kicks in. We can expect export driven stocks to remain flat as the Rupee possibly strengthens and IT firms realize that other sectors are bound to fare better under the new government's economic policies."PHD Chamber of Commerce President Sharad Jaipuria said: "Manufacturing sector reforms should be at the top of the agenda of the new government to enhance its growth and productivity to generate millions of employment opportunities in the economy".

Dinesh Kanabar, Deputy CEO, KPMG in India 
Irrespective of who forms the Government at the Centre and who becomes the Finance Minister, the one thing which is clear is that the country needs to get back to the path of rapid development if it has to emerge as a economic powerhouse and be spoken of in the same breath as China.
 
The key to the revival of economic growth is the renewed investment, particularly in the infrastructure space. The FDI in India took a back seat thanks to flip flop in the economic policies, clogging up of the approval process for large projects and confrontist tax policies. The first task of the new Government would be to deal with these three issues. We cannot have ambivalent policies in retail, an ambiguous stand on Mauritius tax treaty, a ministry which sits on large projects for environment clearance and an imposition of retrospective taxation.
 
While the revival of economy is always viewed as a long term process, there are indeed low hanging fruits for the new Government. A strong statement of stable economic, investment and tax policies in the first Budget to be presented by the new Government in the next few weeks will be the first opportunity to make a statement to the world that India is back in business. All of us would be waiting with bated breath for this whiff of fresh air!
 
U.R. Bhat, Managing Director, Dalton Capital Advisors, Mumbai
"Immediate challenge is to just meet expectations as they run pretty sky-high for this government.

"The balance between centre-state government, fiscal and governance deficit, will be important issues to handle by the new government.

"Foreign investors are looking for new government to address the subsidy regime, infrastructure management, fiscal situation and tax issues."

Navneet Munot, Chief Investment Officer, SBI Funds Management, Mumbai
The results look very orangey and rosy for the markets. Completely better than what markets would have anticipated.

"He can afford to have a smaller but stronger cabinet, that means a far more decisive government. He has been saying less government and more governance, we are really likely to see that. The speed of decision making and execution is something that will clearly be visible right away.

Venugopal Dhoot, Chairman, Videocon Industries Vedi.ns, Mumbai
"The key takeaway is it will be a stable government, which means the government will be under no pressure to not revive economic reforms, bring down the inflation and restart the infrastructure building activities, which were not happening.

"It's not going to happen immediately, all these things will happen gradually, but the direction will be positive and that will boost the sentiment of the foreign investors. I think we can get to 10 percent growth during Modi's tenure."

Abhay Kumar, CMD, Griha Pravesh Buildteck Ltd 
We welcome the new government and would like to extend our good wishes. We are now expectant that the real estate policies that were kept on hold will materialise and decisions will be fast tracked to ensure that the sector revives at a quick pace. We are also hopeful that the new government will be stable and decisive. Stability will bring confidence back in the markets. Clear and favourable economic mandates are what India Inc will now want to see. 
 
Also we wish that the government will now look into giving the real estate sector an infrastructure status.”
 
Pankaj Murarka, Head Of Equities, Axis Asset Management, Mumbai
"This is the best thing that could have happened for the market, we couldn't have asked for anything better than this.

"I think this is the beginning of a new growth cycle of India, this is the beginning of new bull market.

"Clearly now, the government does have quite a few challenges as they take office, but at the same time there are too many low hanging fruits in India and if you can fix those, you can get the momentum going. Fuel subsidy is the one, obviously, in terms of the easier one to fix, and likewise tax reform and insurance reform can get the ball rolling."

Puneet Bhatia, Managing Director And Country Head, TPG Capital, Mumbai
"It's decisive mandate. And Modi will be coming in with a burden of a lot of expectations. The key challenge would be to deliver on these expectations.

"Reviving the economy and bringing the growth rate back would be the major challenge. The world is watching how the new government would nurse the economy, how it will put an end to policy paralysis and bring in the governance back."

Shubhada Rao, Chief Economist, Yes Bank, Mumbai
"The challenge is how to unleash a positive multiplier through kickstarting investments, with focus on job creation, and the acid test will come on how they will handle the impact of a likely El Nino on inflation. The first important milestone will be the budget, which will be watched closely for both quality of fiscal adjustments, credible fiscal math and sensible policymaking.

"There would be equal emphasis on the centre-state relations, which would be a big positive in the new regime.

"I think the economy has lost significant momentum. First they have to carefully balance and anchor expectations and bring them to realistic levels while simultaneously beginning to deliver by reviving investments and addressing impediments including the investments in the pipeline."
 
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Ilker Ayci, Investment Support & Promotion Agency of Turkey (ISPAT) - Republic of Turkey Prime Ministry & President and President of WAIPA

India and Turkey are emerging markets with strong historical ties that cooperate in forums like the G-20, whose presidency will be assumed by Turkey in 2015. With the new Indian government having taken charge following a historic win, the two countries must explore further areas for cooperation and benefit more from each other's economic opportunities.

For Indian companies looking for a global reach, Turkey has a geostrategic location with access to 1.5 billion consumers, representing a GDP of USD 23 trillion. Turkey's dynamic, stable and attractive economy, with a productive and skilled labor force, is one of the driving factors that encourage Indian companies to invest in Turkey. 180 Indian companies, including the Aditya Birla Group, Tata Group, Jindal Group, Indorama, Mahindra, Dabur, Polyplex, Zomato and many others now operate in Turkey. These companies benefit from Turkey's European standards at emerging-market costs. Considering the strong interest shown by Indian business, we target to have 1,000 Indian companies in Turkey by 2019. We are also confident that the Tata Group will boost its presence in Turkey substantially in the coming years.The Turkish government offers the best investment incentives in the region, namely reduced corporate tax, VAT and customs duty exemption, social security premium support, etc., all of which enhance the competitiveness of Indian companies.

Prof. Siddharth S. Singh, Associate Professor of Marketing at the Indian School of Business
Brand India was damaged significantly under the UPA regime. Although people within the country and the NRI community are excited about the Modi government, others abroad have doubts. The new government must focus on steps to revive the enthusiasm about India in other countries. And that means taking immediate steps to strengthen the economy and ensuring that fears about the Modi government are not realized. The Modi government needs to pay significant attention to the education sector at all levels. The government must promote innovation and competition to give boost to quality education. Status quo is very harmful for the country. Two sectors that the government must strengthen for the long-term benefit of the country are education and defense. In our changing environment, the government needs to encourage innovation and competition to boost quality education. The defense sector has been a den of corruption that has left the country weak. The new government must focus on developing capabilities in this sector to reduce the reliance on imported arms. The link between civilian and the defense sector within India must be strengthened for the defense sector to benefit from world class talent and capabilities in other fields.   “
 
Dr Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries Limited
We hope that the new government initiates steps that has the potential to reverse the current downturn into a growth momentum, which is really the need of the hour. The sharp economic slowdown in India over the last few years has seriously eroded India’s competitiveness. It is therefore imperative that investments are fast tracked, especially in the infrastructure domain. I am also hopeful that the new government will be able to focus towards better tax compliance, bolder disinvestment programmes to boost resources. Additionally, if India truly needs to build on its infrastructure capabilities, then it requires a strong focus on manufacturing. It is critical that the manufacturing sector is given the necessary impetus which is also vital to ensure jobs for the youth.  It's an immediate requirement that as a country we need to create  10-12 million jobs per annum in order to support our youth who would be coming into main stream every year. The govt. therefore needs to give more stress on skill development so that education levels, in terms of quality and capacity, should be more in sync with employability. Healthcare is another area that we hope this government would continue to invest in. My best wishes to the new government to get India on high pedestal yet again”.

Radhika Rao, Economist, DBS, Singapore
"The to-do-list is long and the ball is in the incoming government's court to walk the talk on reviving growth and addressing macro challenges.

"The new government is bound to face challenges on several fronts soon after taking office, foremost amongst which is the fiscal consolidation agenda.

"If the fiscal math is fixed, the FY14/15 deficit could be higher than 4.1 percent but might not attract negative reaction if a medium-term roadmap accompanies the fiscal document. Tackling inflation and improving the macro and regulatory environment to make it conducive for investments will also be key.

"On monetary policy, pressure might mount on the RBI to complement the government's pro-growth stance, but the RBI is unlikely to oblige given firm inflation."

A Prasanna, Economist, ICICI Securities Primary Dealership Ltd, Mumbai
"The key thing for the new government to do is to manage inflation and fiscal deficit, then everything else will fall in place.

"The government should focus on long-term measures to boost growth, and not short-term, and that will yield results from the second to fifth year.

"The kind of mandate the new government is likely to get will help them to be secure enough for five years. There is no excuse for not taking long-term measures if one comes to power with a big mandate."

Phani Sekhar, Fund Manager, Angel Broking, Mumbai
"The market's in a romantic state, it needs to tone down its expectations."

"The biggest worry in immediate short run will be inflation, as CPI (consumer price index) has again gone up in April and there is El Nino prediction and RBI is giving indication that it might raise rates."

"I do not get the rally in state-run stocks. Most of them have run up on valuations and disinvestment hopes, which is not sustainable."

Sunil Duggal, Chief Executive Officer, Dabur India, New Delhi
"(BJP) are getting a clear mandate, so they need to be quick in fulfilling their promises to revive growth. The sentiment in corporate India is hugely positive because we are confident this government will take urgent steps to revive the economy.

"One of the biggest challenge is inflation and it will be interesting to see how Mr Modi brings down what has now been a nagging headache for businesses across sectors."

Ranjit Shahani, Managing Director, Novartis India Ld, Mumbai
"A stable government at the centre augurs well for the economy. India has a catch-up game to play and our time starts now."

Leif Eskesen, Economist, HSBC, Singapore
"It's important to be realistic about how quickly they can instigate change. It takes time to, number one, get economic reforms through the political machinery, and number two, it also takes a while before economic reforms actually have a positive impact on the economy.

"Yes, changes will most likely materialise post-elections, but I think we’re still looking at a relatively slow turnaround in growth and a protracted recovery. So we’re still looking at current fiscal year growth of 5.3 percent year-on-year and then we could potentially next fiscal year, that starts in April 2015, move to around 6 percent."

Nilesh Shetty, Fund Manager, Quantum Asset Management, Mumbai
"The (market) move was expected so I'm not surprised in that sense, but I'm just slightly concerned about the way the market is headed in terms of valuations.

"Markets are not building up any major expectations in the short run from the government, but what they are hoping for is a roadmap in the short run to clear up a lot of problems in the economy. Even the most optimistic investors have sort of resigned to the fact that the short-run could be a bit weak for India."

Upasna Bhardwaj, Economist, Ing Vysya Bank, Mumbai
"The early vote counting suggests a strong comeback of the BJP. We expect the immediate challenge for the government will be to prop up growth and ease inflation.

"Expect the government to begin with releasing the buffer food stocks to tame food inflation and also to boost growth. The stalled investment projects need to be further fast-tracked, something which the government should take up immediately by providing a one-stop window for clearances both at the centre and the state.

"I think RBI will continue with regular consultations with the new government to show them the importance of taming inflation, at the same time introducing other growth-enhancing measures.

"The budget this year will not have too many big ticket announcements, though some adjustments to the borrowing calendar is likely."

Ajay Garg, Managing Director, Equirus Capital, Mumbai
"There is a significant sentiment change, and this will improve liquidity in the capital markets."

"However, this is not an easy government to take over. Growth is still not there. You have a significant inflation to take care of. Interest rates cannot be brought down the next day. Revival of the investment cycle is not that easy."

Abheek Barua, Chief Economist, HDFC Bank, New Delhi
"I think the new government will take the infrastructure route and get projects executed. I think the Gujarat government has been excellent in this, going by all parameters, and if they can replicate that at the central level, that could do wonders.

"I think the RBI will have to perhaps modify its stance on core CPI (consumer price index).

"There are very long term structural issues in areas like healthcare, road transportation where supply bottlenecks have built up over decades and there you can not have the simple supply management.

"Perhaps a middle ground can be worked out where interest rates flatten out rather than go up further and inflation targeting as this extreme method of managing inflationary expectation is watered down a little."

Dinesh Kanabar, Deputy CEO, KPMG
Irrespective of who forms the Government at the Centre and who becomes the Finance Minister, the one thing which is clear is that the country needs to get back to the path of rapid development if it has to emerge as a economic powerhouse and be spoken of in the same breath as China.

The key to the revival of economic growth is the renewed investment, particularly in the infrastructure space. The FDI in India took a back seat thanks to flip flop in the economic policies, clogging up of the approval process for large projects and confrontist tax policies. The first task of the new Government would be to deal with these three issues. We cannot have ambivalent policies in retail, an ambiguous stand on Mauritius tax treaty, a ministry which sits on large projects for environment clearance and an imposition of retrospective taxation.

While the revival of economy is always viewed as a long term process, there are indeed low hanging fruits for the new Government. A strong statement of stable economic, investment and tax policies in the first Budget to be presented by the new Government in the next few weeks will be the first opportunity to make a statement to the world that India is back in business. All of us would be waiting with bated breath for this whiff of fresh air!

Vikas Khanvelkar, MD, DesigTech Systems Ltd
Overall economic policy should be to boost growth back to more than 8 per cent level over the next 2-3 years.
Multiple levels of taxation should be reduced and GST should be implemented as soon as possible.

Taxation disputes with MNCs like Vodafone should be amicably settled to create investment friendly atmosphere
Most important the corruption issues like Coalgate, 2G scam etc should be avoided and transparent governance should be established.

Infrastructure development and water management should be a priority.
Rabindra Jhunjhunwala, Partner, Khaitan & Co.
“The results are an indication of the prevailing sentiments in the country. The largest democracy has given its verdict, its Modi all the way and what a phenomenal show! All eyes are on Mr Modi now for delivering a new India.” says Rabindra Jhunjhunwala, Partner, Khaitan & Co.
 
Narayanan Ramaswamy, Partner and Head, Education Practice, KPMG in India 
“The 16th Lok Sabha polls saw an unprecedented 10 crore first-time voters – emphasizing the young demography and the dividend it can pay. The new government should focus on increasing quality of education and training and create employment opportunities. “
 
“Setting up a dedicated ministry for skills becomes very relevant in 21st century where as a nation India is poised to be home of largest youngest population in the world. This would lead to greater accountability in terms of creating skill ecosystem, streamlining of multiple skill-development and training initiatives by various government ministries and a far more coherent approach. “
 
“Increasing education spend to 6% of GDP is a long due demand and the new government should endeavor to build consensus on that. Higher allocation would mean better academic infrastructure, inviting best talent, increased focus on research & development and lessening industry academia gap. Rashtriya Uchchatar Shiksha Abhiyan (RUSA) is a welcome initiative by previous government and new government should focus on strengthening it further.”
 
“Other key initiatives could be- vocationalization of school curriculum, stronger implementation of RTE and transparent and effective spending of SSA funds, effective roll-out of RMSA, introduction of foreign education bill, modernization of ITI’s and strengthening of NSDC, NSDA and State Skill Missions."