The BSE Sensex may be in the midst of a mega bull run, but India’s leading investors expect it will take the Narendra Modi government at least three to four quarters to start delivering on its promise of an economic revival.
“The sentiment has turned positive but industry realises that Mr Modi doesn’t have a magic wand. What industry and investors are looking for now are signs of intent. If that is positive, people will be willing to give the government time,” said Milind Barve, managing director, HDFC Asset Management Company Ltd.
Added Hemendra Kothari, chairman, DSP BlackRock Investment Managers: “This year, we expect 5.5-5.75% growth. Next year (2015-16), this may rise to 7%.” The Indian economy grew at 4.5% in 2012-13 and 4.9% in 2013-14.
Their wish list: kick start stalled projects worth more than Rs 7 lakh crore, resolve the retrospective tax case with Vodafone, empower the bureaucracy to take decisions without fear and come out with transparent norms on environmental clearances.
Kothari expects the Sensex to touch 30,000 one year from now. But El Nino and the possibility of a below par monsoon hitting economic growth will continue to hang over the economy like a dark cloud.
The Cabinet Committee on Investments, set up by the UPA-II government, did clear several stalled projects but there was little change on the ground. “That is where the NDA government will have to focus,” said N Sivaraman, president & whole time director, L&T Finance.
“The government should also announce a massive project like the Golden Quadrilateral, which can become an engine of growth for the entire economy for many years,” said Nilesh Shah, managing director & CEO, Axis Capital.
Industry has noted the fact that Modi has asked secretaries of various ministries for reports on schemes and projects under their charge. “That is extremely positive and shows that he means business,” said Sivaraman.
Parag Parikh, chairman, PPFAS, warns retail investors not to get carried away. “There will be short-term pain in the economy before things improve. So, invest your money with care. Otherwise, you can get badly hurt.”