Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Will Narendra Modi be able to meet expectations?  Join our daily free Newsletter

MENAFN - Khaleej Times - 21/05/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - Khaleej Times) The prime minister-elect has stoked the expectations by saying he could make the 21st century ?india?s century? within 10 years.

daunting political and fiscal traps lie in wait that could ensnare new centre-right leader narendra modi as he embarks on the gargantuan task of fulfilling india’s undoubted economic potential observers say.

the landslide election win by modi’s hindu nationalist bharatiya janata party (bjp) could be a game-changer they say but any economic transformation will take time in the emerging-market giant of 1.25 billion people where competing interests abound.

“expectations have built up very quickly too quickly” sidharth birla president of the federation of indian chambers of commerce and industry (ficci).

mumbai’s headline share index extended a heady rally on tuesday to a new closing high and one of india’s top investors rakesh jhunjhunwala forecasts the “mother of all bull runs”.

the prime minister-elect has stoked the expectations by saying he could make the 21st century “india’s century” within 10 years.

but modi “will need to exercise reality management” to temper investor and voter hopes birla said as the 63-year-old finalises his ministerial team before taking office on monday.

the bjp ousted the left-leaning congress riding a tide of public anger over tepid growth high inflation rampant graft and a sclerotic political system.

modi oversaw double-digit annual growth in a dozen years as chief minister of gujarat state and campaigned for national leader on his “modinomics” mantra of “less government more governance” pledging to spread his economic model nationwide.

top of a 12-point business wish list issued by the ficci is a call to sweep away the remainders of the so-called “licence raj”.

that refers to bureaucratic controls dating from british colonial rule that have stalled multi-billion-dollar projects as well as small investors wishing to start up businesses.

analysts say india is also in dire need of more roads ports and other infrastructure to boost productivity if it hopes to emulate rival china’s economic miracle along with a simplified tax system and reform of a cumbersome land acquisition process for industrial projects.

in gujarat modi centralised control and gained a reputation for browbeating india’s notoriously slow bureaucrats.

he was known as a tough taskmaster and reports say his office has already begun sounding out chief secretaries in various ministries asking them why stalled infrastructure or industrial projects have been held up.

but the challenge is greater on the national stage where high consumer inflation has kept interest rates elevated discouraging consumer spending and investment.

meanwhile a hefty fiscal deficit means the new bjp administration has no fiscal firepower to spur an economy growing at 4.9 per cent — half the level notched up as recently as 2011.

serious structural economic problems complete modi’s difficult hand as highlighted in a new world bank “ease of doing business” survey that ranked india at a lowly 134th among 185 nations below its brics peers brazil russia china and south africa.

“we have got to change how india is perceived” said birla citing years of project clearance delays graft and red tape which have tarnished india as an investment destination.

an average infrastructure project for instance needs approval from around 20 federal ministries. a convenience stores needs close to 30 licences to sell milk bread and other goods the retailers association of india says.

“the lowest-hanging fruits (to improve the investment environment) are fast-tracking of projects in the pipeline” said roopa kudva managing director of rating agency crisil.

but even with the bjp’s lower house majority “the government won’t have everything its way since power is dispersed in india” said capital economics analyst mark williams.

many reforms such as introducing the wish-list proposal of a simplified national tax require state approval under the nation’s federal system williams noted.

the bjp and its allies control only eight of the 29 state governments. congress remains in control of the upper house of parliament which must sanction legislation.

business leaders would also like india to relax strict hire-and-fire labour laws they say discourage industry from creating jobs for its youthful population but this is not on the “to-do” list as easing job protection is seen as unpopular with voters.

nervousness about jobs is also a reason the bjp says it will not allow foreign supermarkets into the lucrative retail market dominated by small convenience stores — overturning a congress government policy.

meanwhile modi showed no sign on tuesday of departing from some of the populist policies of the previous congress government emphasising how his administration aimed to serve india’s hundreds of millions of poor.

“to meet their aspirations and hopes this is our responsibility because our weakest poorest have sent us here” he said breaking down briefly in a rare display of emotion as he faces up to fulfilling the sky-high expectations of the world’s biggest electorate.

for more news from khaleej times follow us on facebook at facebook.com/khaleejtimes and on twitter at ?khaleejtimes

follow ?khaleejtimes -->


 


Khaleej Times




  MENA News Headlines
 Sep 19 2014 - Gilas seeks to end Asiad gold droughtArab News
(MENAFN - Arab News) GILAS PILIPINAS leaves for Incheon in South Korea on Saturday to gun for the Philippines' first basketball gold medal in more than five decades in the Asian Games with the ...

 Sep 19 2014 - Aafia Siddiqui seeks to abandon her legal fight for freedomArab News
(MENAFN - Arab News) NEW YORK: A Pakistan-born neuroscientist has become a rallying cry for militant groups demanding her release from a US prison. But in a little-noticed move she is trying to ...

 Sep 19 2014 - Australia foils IS plot 'in largest ever anti-terror raids'Arab News
(MENAFN - Arab News) SYDNEY: Australia's largest ever counterterrorism raids on Thursday detained 15 people and foiled an alleged plot by Islamic State (IS) militants to conduct 'demonstration ...

 Sep 19 2014 - Iraq PM opposes foreign soldiersArab News
(MENAFN - Arab News) BAGHDAD: Iraq's prime minister strongly rejected the idea of the US or other nations sending ground forces to his country to help fight the Islamic State group saying Wednesday ...

 Sep 19 2014 - Armed Shiite rebels push into SanaaArab News
(MENAFN - Arab News) SANAA: Armed Shiite rebels pushed into Yemen's capital Sanaa after clashing with the army in the city's northwest outskirts on Thursday security sources and residents said in an ...

 Sep 19 2014 - US: Assad broke chemical arms agreementArab News
(MENAFN - Arab News) WASHINGTON: US Secretary of State John Kerry on Thursday accused Syrian President Bashar Assad of breaking the terms of a global pact on chemical weapons by unleashing chlorine ...

 Sep 19 2014 - Alpen Capital commences operationsArab News
(MENAFN - Arab News) Alpen Capital Saudi Arabia has been licensed by the Capital Markets Authority (CMA) to commence operations. The company has established its first office in Riyadh and hired a ...

 Sep 19 2014 - Renault claims to excel in aftersale servicesArab News
(MENAFN - Arab News) Renault described as the number one European brand in the Kingdom claims to deliver the best aftersale services maintenance and spare parts across Saudi Arabia.Renault says it ...

 Sep 19 2014 - Abuja: Emirates upgrades aircraftArab News
(MENAFN - Arab News) Only two months after launching its operations to Abuja Emirates a global connector of people and places announces it will upgrade the route's operating aircraft to a Boeing ...

 Sep 19 2014 - SABB Takaful backs school bag donation drive for low-income familiesArab News
(MENAFN - Arab News) SABB Takaful Company sponsored a charity campaign aiming to provide school bags to students from limited income families. The community service project was held on the first day ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help