Consistent economic slowdown, coupled with governance crisis, has not only shaken the business confidence in the country, but has given industry leaders enough reasons to label the UPA-II leadership as ‘inefficient’ and ‘corrupt’, with more than half of those surveyed supporting the fact,, according to the fourth part of the HT-MaRS Governance survey. Civil society, bureaucracy and judiciary, on the other hand, have comparatively fared well in the survey results.
Citing reasons for its poor performance, ex-Infosys board member, V Balakrishnan said, “In major sectors such as coal and power, government has not undertaken any major reforms in its tenure. Under such circumstances, growth will automatically go down. The corrupt policies (of the government) have had a bad impact.”
The other factors which, as per the survey findings, affect corporate India are the government’s inability to appropriately reflect industry preferences in policy-making, facilitate discussion with industry vis-à-vis major shifts in industrial policy and take tough decisions that may fail in popularity but help industry grow. To some extent, government is also blamed for its discriminatory business practices, with many believing that economic regulations are applied in an ad-hoc manner. About a fifth of CEOs believe that special treatment is given to cronies of those in power.
“Indian industry appears to be at odds with the governance system in the country, may not be to a great extent but definitely in a significant manner,” said Raghu Roy, chief executive, MaRS, the research agency which conducted the survey. Rating the business society on same parameters, he said, “They are hard on themselves too. On ‘efficiency’, they give themselves an average rating of 3.5, which is good but on a scale of 5, far from being excellent. Similarly on ‘corruption’ the average score that industry gives itself is 2.7.”
“Industry needs the government as much as the government needs the industry, but we are far from reaching equilibrium on this aspect,” said a CEO, who did not wish to be named.
So, amidst the crisis, those who wish for regime change, expect what from the new government? “Confidence in the economy is of utmost importance. Involvement of both public and private sectors can help achieve this goal. Implementation of tax reforms--goods and services tax (GST) and direct tax code (DTC) -- is crucial too,” said Balakrishnan, who joined Aam Aadmi party in January this year.Will the replication of the Gujarat development model in the rest of the country be an answer? "Simplified laws, effective governance and transparency in the system- as long as these three elements are not in place, no model can be development friendly,’ he further added.