8 February 2012
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Insights from bureaucrats
the
Enter the PMO: Emerging like a phoenix
Its initiatives to kick-start economic engine has many beneficiaries
After a long period of hiatus during which the Government was widely criticized for policy inaction
while opposition and coalition politics too were blamed for stalling key reforms, government
seems to have tightened its belt to streamline the decision making process. The mechanism of
Prime Minister's Office (PMO) as the key authority has entered the policy-making scene to signal
progress in several economic initiatives, including dealing with contentious economic matters
involving several ministries. We believe that the PMO assuming a central role assumes great
significance in the current stalemate, but execution still remains the key challenge.
Swinging into action mode, time-bound plan to address critical issues
The big-bang New Year entry of the PMO on the policy making scene has been
a positive surprise. January 2012 has been a power-packed month for the PMO;
its actions have caused the business environment to turn from negative to
cautiously optimistic:
The PM himself called on industry leaders not to be drawn into the negative
atmosphere and expressed his commitment to the reform agenda.
Sector specific agenda has also been taken up, most notably power, where
a time-bound action plan has been promised. The progress since the initial
meeting with the CEOs has been impressive.
A tight monitoring system to track investment plans of cash rich PSUs has
been adopted, with FY13 spending target at INR1.8t (double the highest
ever in FY11 at INR931b).
The PMO seeks to give a thrust to skill development during the Twelfth
Five-Year Plan (FY13-17). Also necessary agencies are created for promotion
of tourism, de-regulation of sugar and development of inland waterways
transport.
India's PMO has a sound track
record of getting things done
PM Narasimha Rao (1991-1996)
Involvement of PMO:
Involved in every
important decision-
making panel,
including its
economic policy
agenda
PM AB Vajpayee (1996, 1998-2004)
Involvement of PMO:
Steered several
high impact
schemes like
national highways
and telecom;
including foreign affairs
PM Manmohan Singh (2004 to date)
Involvement of PMO:
Currently pushing
for progress on
various issues,
including
contentious
economic matters involving
several ministries (e.g. power
sector logjam)
Impact
#1 Cash-rich PSUs may revive investment activity (see
page 2)
#2 Power sector imbroglio could get significantly resolved (see
page 4)
Our view
While PMO swinging into action is a positive in instilling a sense of control at
the top, the current situation would warrant visible action delivered through
such organizational restructuring. Several beaten down stocks and sectors like
PSU Banks, Capital Goods, Power Generators, Infrastructure, etc have responded
quite favorably to the changing dynamics. While this could possibly be a
harbinger of events to be expected, execution needs to be demonstrated.
Key potential beneficiaries of PMO intervention
Power Generators | Coal Miners | Financials | Capital Goods | Infrastructure
Satyam Agarwal
(Agarwals@MotilalOswal.com); +91 22 3982 5410
Sandipan Pal
(Sandipan.Pal@MotilalOswal.com) /
Dipankar Mitra
(Dipankar.Mitra@MotilalOswal.com)

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Impact #1: Cash-rich PSUs may revive investment activity
FY13 investment target at INR1.8t double the highest ever in FY11 at INR931b
The PMO has adopted a tight monitoring system to track investment plans of cash rich
PSUs. During a meeting held on 3 January 2012, the Principal Secretary to PM, Mr
Pulok Chatterjee reviewed the investment plan of cash rich PSUs. The PMO would
institute a monthly review mechanism to ensure smooth and maximum realization
of the investment plans, which would be built into MoUs for suitable periodic appraisal.
PSUs with high cash balance but low investment plan within core business (e.g. Coal
India – cash balance INR560b, FY13 capex plan INR103b) have been directed to consider
investments in allied sectors. Responding to this directive, Coal India CMD, Mr N C
Jha had stated in media interviews that the company, to deploy its surplus cash, will
(1) invest in the eastern freight corridor, (2) build power plants, and (3) boost capital
expenditure.
Amidst severe slowdown concerns and curtailed investment plans in the private
sector, the possible offsetting impact of sharp scale-up in investments by PSUs would
be the key thing to watch out for. Sixteen key PSUs have total cash surplus as of
INR2,121b, while stated investment plans stand at INR1,764b (~83% of surplus cash).
If successfully implemented, the capex by these PSUs in FY13 would be almost double
the highest ever capex of INR931b in FY11.
PSU capex likely to see sharp ramp-up in FY13 – can this substitute private sector investment slack?
(INR b)
ONGC
PGCIL
OIL
NHPC
GAIL
NTPC
IOCL
CIL
MRPL
NALCO
SAIL
BHEL
931
703
NMDC
1,764
the
851
404
426
9
FY01
15
FY02
66
FY03
109
FY04
249
274
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY13E
Source: Media/MOSL
The PMO has instituted a four-tier scrutiny system to track investments by cash-rich
PSUs. According to a PMO note, “It has been decided that investment plans that have
been provided by the PSUs will be built into the memorandum of understanding
(that each PSU signs with the Department of Public Enterprises) so that they can be
suitably appraised as a part of the MoU.” The Department of Public Enterprises rates
each PSU against the MoU targets set before the fiscal year. An ‘Excellent’ rating
allows a PSU to disburse 100 per cent of basic pay as performance related pay (PRP) to
its executives while ‘Very good’, ‘Good’ and ‘Fair’ permit PRP at 80 per cent, 60 per
cent and 40 per cent of basic pay, respectively.
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The PMO note warns that each PSU head would be responsible for ensuring that
“projected investment plans are realized to the fullest extent” with the administrative
ministry as the second check post that would also be held accountable for any deviation
from targets. The progress would then be escalated to the member secretary of the
National Manufacturing Competitiveness Council who would hold a quarterly review
and report to the Principal Secretary to the PM for “appropriate follow up”.
Even an ambitious capex plan can be addressed with ~83% of surplus cash balance
PSU
CIL
ONGC
NTPC
NMDC
SAIL
OIL
BHEL
PGCIL
NHPC
NALCO
BEL
NLC
GAIL
Concor
IOCL
EIL
MRPL
Total
Gross surplus
Total domestic
Overseas
cash (INR b) investment (INR b) Investment (INR b)
560
331
264
209
163
143
83
79
63
56
45
44
21
20
18
17
5
2,121
43
331
210
45
145
34
33
200
41
23
17
17
85
17
96
10
68
1,414
60
205
0
2
0
70
0
0
0
0
0
0
9
0
4
0
0
350
Capex plan
FY13 (INR b)
Capex/surplus
cash (%)
the
103
18
535
162
210
80
47
22
145
89
104
73
33
39
200
252
41
65
23
42
17
38
17
38
94
444
17
83
100
571
10
61
68
1,311
1,764
83
Source: Media/MOSL
Key risks:
(1) Track record of weak execution, (2) Capital misallocation due to potential
investment in non-core business
Sectors to watch:
(1) Capital goods (2) Infrastructure/Construction
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Impact #2: Power sector imbroglio could get resolved
90-day revival plan with monthly milestones
A high-powered meeting led by PMO was held on 18 January 2012 with several Cabinet
Ministers and CEOs of power companies including from Tata group, ADAG, GMR, GVK,
Adani, Vedanta, Jindal, Lanco, etc. The key agenda was to address the logjam in the
power sector.
the
Key takeaways as indicated in various media articles
Just an eclipse ...
... brighter days ahead
Prime Minister, Mr Manmohan Singh promised to take immediate, decisive action
to solve the power sector’s problems in a time-bound manner and convert the
looming crisis into an opportunity.
PMO’s office has stated that a ‘practical, pragmatic and viable solution’ will be
found to the plethora of problems facing the power generation and distribution
sector.
Principal Secretary, Mr Pulok Chatterji has been mandated to form a
Committee
of Secretaries (CoS)
that should
meet every week
and apprise the PM about the
progress
once a month.
PMO’s office has directed CoS to prepare a 90-day revival plan which will have
monthly milestones.
The CoS has identified five key areas for government intervention — (1) gas
linkage, (2) Coal India fuel supply agreement, (3) diversion of surplus coal from
captive mines, (4) forest clearance for allocated captive coal mines located in
dense forests, and (5) Indonesian coal pricing issues relating to Mundra and
Krishnapatnam UMPPs (ultra mega power projects).
Empowered groups of ministers (EGoMs) on gas, coal and UMPPs will meet shortly
to clear the pending issues.
Mr Chatterji will once again meet the delegates in one month to apprise them of
the progress made.
PM will once again meet the group of CEOs after 90 days to
review progress.
Progress till date:
Media articles indicate that the CoS has already convened meetings
of EGoMs for gas, UMPPs and coal.
EGoM on coal met on February 1, and the PMO has recommended that Coal India
should sign fuel supply agreements (FSAs) with all power projects that have been
commissioned till December 2011. Besides, it has also been asked to ensure that
under the FSAs, Coal India commits to supply enough coal to help these projects
run at 80% capacity or face penalties. That implies minimum annual coal
requirement of 425m tons for power sector. The ministerial panel has also been
asked to ensure speedy forest clearance to eight captive coal blocks including
Chatrasal, Mahan, etc located in dense forest areas. The CoS has also asked the
Coal Ministry to prepare a policy to facilitate diversion of surplus coal in captive
coal blocks through consultations with the concerned ministries.
Gas allocation EGoM is meeting on February 24 to ensure gas linkage to 8GW
projects expected to be commissioned by March 2012 end. The ministerial panel
has not met for the last two years.
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the
Ultra mega power projects (UMPPs) EGoM is to look into the Indonesian coal
pricing issues affecting Mundra and Krishnapatnam UMPPs which are caught in a
contractual bind as the existing power supply contracts do not allow tariff revision
due to increase in fuel costs.
Our view
Complete lack of co-ordination across ministries, persistent delays and logjam
had led the matter to be escalated to the highest level. The initiatives taken now
indicate the seriousness, and urgency on the part of authorities for an important
sector.
Domestic coal production is near stagnant for 3 years in a row.
Coal India’s
production target is now at 440m tons in FY12 v/s 431m tons in FY11 and 430m tons
in FY10). This is due to multiple reasons: 1) Environment/forest clearances, 2)
Evacuation issues, 3) Operational slippages owing to adverse climatic conditions,
etc. We believe that Coal India remains the most non-controversial way to increase
domestic production and thus, this leads to hopes for uptick in production in
FY13/14. Similarly, declining gas supply/production and capacity addition by several
IPPs have led to both existing and new projects being stranded for fuel.
Support for UMPP projects based on imported coal needs more clarity.
Our past
discussions with incumbents (Tata Power, Reliance Power) suggested several
hurdles which need to be addressed including “State government willingness (as
power is procured by discoms, which are counterparty to such PPA)”. This, in our
view, is unlikely to be resolved in haste, and would go into several deliberations
before any final outcome. We would be watchful of any development on this
front. TPWR could be biggest beneficiary, assuming “support” indicates 100% fuel
cost pass through (v/s 50% currently).
Development of captive coal block,
in our view, is an equally pressing issue and
thus, resolving issues on related environment and forest clearance and land
acquisition is critical.
Another contentious issue has been the
Power Purchase Agreements (PPAs)
between states and developers, which have been jeopardized given lower
domestic coal supply, high imported coal prices, regulatory changes in countries
like Indonesia and Australia, etc. This remains to be watched.
… while 42-45GW thermal capacity added in FY10-12E
8
6
3
Coal India production stagnant for 3 years now ...
500
400
300
1
200
100
-2
-5
Producti on (m ton)
Growth (% YoY)
Source: Company/MOSL
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Captive mines production ramp up slow ...
(m tons)
35
30
21
18
14
4
6
8
10
4
2
2
2
0
10
23
0
0
7
2
7
32
58
42
the
... despite ~300b tons of captive reserves awarded in 2006/07
39
(b tons)
163
129
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Source: Ministry of Coal/MOSL
Domestic gas production declining during FY11-13E ...
FY08
APM - ONGC & new
APM - OIL
RIL KG-D6
Private / JVs
Others - ONGC, Essar
Domestic Supply
48.3
5.0
21.0
74.3
FY09
48.2
4.8
25.0
78.0
FY10
50.3
5.3
40.0
25.0
1.5
122.1
FY11
FY12E
FY13E
50.0
50.0
50.0
6.1
6.5
7.1
56.2
43.0
35.0
25.0
23.0
22.0
5.0
6.0
7.0
142.3
128.5
121.1
Source: MOPN/Infraline/MOSL
... but new gas projects of 7GW+ await fuel allocations
Project
Pragati Ph III
Hazira
Pipavav
Kashipur
Kondapalli
Vemagiri
Sugen Unit 4
Dahej SEZ
Samalkot
West Godavari
Rajahmundry
Kashipur
Kashipur
Total
Company
Total (MW)
1,500
351
702
450
770
768
382
1,200
2,400
100
436
225
225
9,509
XI Plan (MW)
1,250
351
702
450
770
768
382
400
1,400
100
196
225
225
7,219
State
Delhi
Gujarat
Gujarat
Uttarakhand
Andhra
Andhra
Gujarat
Gujarat
Andhra
Andhra
Andhra
Uttarakhand
Uttarakhand
Source: Media/MOSL
Bawana
Guj State Energy Generation
Pipavav Power Company
Shravanti Energy
Lanco
GMR
Torrent
Torrent
Reliance Power
Panduranga Energy
RVK Pvt
Beta Infratech
Gama Infratech
Key risks:
(1) Some of the initiatives like increasing domestic coal production involve support
from the local administration and population, which has been volatile.
(2) Major policy actions like increasing gas production, diversion of surplus coal from
captive mines, and Indonesian coal pricing for UMPPs, require strong government
support and rethinking on the existing policy framework, as most of these issues
are contentious and the stakes involved are large.
Segments to watch:
(1) Power generators, (2) Coal miners, (3) Capital Goods including
mining equipment, and (4) Financials.
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Appendix #1: Know the PMO
Policymaker of the last resort
the
Background of PMO: Composition and key functions/responsibilities
The Prime Minister's Office (PMO) houses the PM and select officers of the Indian
Civil Service who work with him to manage and coordinate government activities.
The Prime Minister, through his office, co-ordinates with all ministers in the Central
cabinet, ministers with independent charge, and also governors and ministers of
state.
The PMO provides secretarial assistance to the PM, and is headed by the Principal
Secretary. The PMO includes the anti-corruption unit and the public wing dealing
with grievances.
Some key responsibilities of PMO include issues related to a) defense, b) important
policy, c) decisions relating to the Cabinet Secretariat, d) Appointments to State
Administrative Tribunals and the Central Administrative Tribunal, UPSC, Election
Commission, etc, and e) judicial appointments requiring Presidential approval.
The power shift
Following the return of
Mr Pulok Chatterji
as Principal Secretary, recent incidents
and decisions taken by PMO strongly indicate a revival of its power quotient after
2004. The PMO's interventions have built up expectation of renewed policy
progress and/or resolution of issues in areas like power sector, other infrastructure
development, UID, etc.
Historically PMO has demonstrated its importance under both Congress and NDA.
Mr Pulok Chatterji
Principal Secretary, PMO
Mr Pulok
Chatterji is
from the
1974 batch
UP cadre
IAS (Indian
Administrative Service).
He was a director in the
PMO during Mr Rajiv
Gandhi's tenure (1984-89).
In the early 1990s, he was
secretary in the Rajiv
Gandhi Foundation, and
then, private secretary to
Ms Sonia Gandhi when
she was the leader of the
Opposition. In 2004, he
was called back from his
last held position of
executive director of the
World Bank to join the
PMO as Joint Secretary,
and was later promoted
to Principal Secretary.
India's PMO has a sound track record of getting things done
Prime Minister
Narasimha Rao (1991-1996)
AB Vajpayee (1996, 1998-2004)
Involvement of PMO
Involved in every important decision-making panel,
including its economic policy agenda
Steered several high impact schemes like national
highways and telecom; including foreign affairs
Key members of PMO
Designation
Advisor to PM
Principal Secretary
National Security Advisor
Communications Advisor to PM
Additional Secretary
Joint Secretaries
Directors
Name
Mr T K A Nair
Mr Pulok Chatterji
Mr Shivshankar Menon
Mr Pankaj Pachauri
Mr R Ramanujam
Mr Pankaj Saran, Mr Shatrughna Singh,
Ms Vini Mahajan, Mr L K Atheeq
Mr Munu Mahawar, Mr Dheeraj Gupta, Dr (Ms) Sharmila
Joseph, Ms Pallavi Jain, Mr Arindam Bagchi, Mr Rajeev
Topno, Mr Sanjay Lohiya, Mr Krishan Kumar, Mr Binoy Job
Mr Indu Chaturvedi, Mr Jaideep Sarkar, Mr K Muthukumar
Mr Gaurangalal Das, Ms Sanjukta Ray, Mr Mehar Jhamb
Mr J P Arya
Mr P K Bali, Mr K Salil Kumar, Ms R Mythili
Source: Office of the PM of India
PMO Personal Staff
Deputy Secretaries
Joint Director
Under Secretaries
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Appendix #2: PMO's big bang New Year entry
January 2012 - a power packed month
One of the key interventions of the PMO in recent times was the defense against a
general perception of government inaction. The PM directly called on industry leaders
not to be drawn into the negative atmosphere and expressed his commitment to the
reform agenda.
Besides, media reports indicate the PMO’s invention in 17 “thrust areas” that cover
effectively all the key areas of ‘inaction’, including the following:
Cash-rich PSUs have been asked to roll out their investment plans to fuel
infrastructure growth
A committee of secretaries under Principal Secretary Mr Pulok Chatterji will
address the
shortage of coal and natural gas
The commerce ministry will identify
large scale national projects
which the PMO
will monitor directly
Health ministry will work out a roadmap on
universal healthcare
based on the
Srinath Reddy Committee report
On
inflation,
a panel under the Director General of Indian Council of Agricultural
Research will identify problem areas for increasing productivity and provide
“doable suggestions”
Setting up of the
National Centre for Cold Chain Development
which will monitor
the creation of additional storage for price-sensitive products like meat, eggs and
poultry
Fine-tuning of the
National Skill Development Program
by helping cut the red
tape
Expanding the
Rashtriya Swasthya Bima Yojana
(National Health Insurance Scheme)
to include sanitation workers, ragpickers, and those working in mines or dealing
with hazardous substances
Fertilizers
department has been asked to draw up, by the end of March, a pricing
and investment policy that involves the private sector
Other initiatives
such as promotion of tourism, deregulation of sugar, and
development of inland waterways.
the
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Chronology of PMO's big bang New Year entry
Date
Action
December 22, 2011
PM chairs meeting of Council on Trade and Industry.
The industry leaders were assured that a mechanism would be put in
place for sorting out bottlenecks in implementing large projects.
In his concluding remarks, the Prime Minister exhorted the business
leaders not to get distracted by the atmosphere of gloom, and assured
them that he and his government remained committed to the reform
agenda, and also to help industry achieve its potential.
Excerpts from PM's New Year Message to Nation
I believe we have made more progress than is commonly realized. I am
personally delighted that Government was able to introduce the Food
Security Bill and the Lok Pal and Lok Ayukta Bill in Parliament.
The Lok Pal and Lok Ayukta Bill was passed by the Lok Sabha. It is
unfortunate that the Bill could not be passed in the Rajya Sabha.
However, our Government is committed to the enactment of an effective
Lok Pal Act.
Taken together with the Right to Information Act, the National Rural
Employment Guarantee Act and the Right to Education Act, these are
legislative legacies that generations of Indians will come to value,
appreciate and benefit from.
The PMO adopts a tight monitoring system to track
investment plans of
cash rich PSUs.
FY13 investment target at INR1.8t is double the highest ever in FY11 at
INR931b.
PM assured the private players in the
power sector
that a "practical,
pragmatic and viable solution" will be found to the plethora of problems
facing power generation and distribution.
Mr Pankaj Pachauri appointed as
Communications Advisor
in PMO.
PM's National Skill Development Council decides to give
skill
development
a major push in the year 2012-13 and 12th plan.
An
inter-ministerial coordination committee for tourism sector
was set
up under the chairmanship of the Principal Secretary to the PM, to resolve
inter-ministerial and industry issues, and promote tourism.
PM constitutes an
Expert Committee on Sugar Sector
under the
chairmanship of Dr C Rangarajan, Chairman, Economic Advisory Council
to the PM.
The Committee will look into all the issues relating to de-regulation of
the sugar sector.
It has been asked to complete its task at the earliest and give its
recommendations to the PM.
Initiated a move to fast track the development and use of
Inland
Waterways Transport
involving the private sector and Public Sector
Undertakings.
The initiative will harness huge potential of inland waterways in
transporting bulk cargo like coal, food grains, fertilizers, project cargo,
fly ash, over-dimensional cargo and containers at competitive cost.
Procedural issues shouldn't impact India's first Infrastructural Container
Transhipment Terminal at Kochi becoming a global cargo hub
Source:
Government of India, MOSL.
the
December 31, 2011
January 3, 2012
January 18, 2012
January 19, 2012
January 20, 2012
January 27, 2012
January 28, 2012
January 30, 2012
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Appendix #3: What actually may have stirred the PMO?
Perception of policy paralysis
The government has come under severe criticism from various quarters due to the
widely-perceived policy inaction, roll back on promises and the general atmosphere
of governance deficit. The fact that this criticism was voiced by rather credible sources
has certainly impacted its reputation. Prominent among them was an ‘open letter’ by
a group of eminent citizens (including business leaders, judges, former central bank
governors, etc.) to correct the ‘governance deficit’ by weeding out corruption by
introducing the Lok Pal Bill. The same group followed up with a second letter to keep
the pressure.
In response, the Prime Minister asked them not to make negative comments and
sought their ‘expressed’ support for measures taken by the government in public
interest. The business leaders remained cautiously optimistic thereafter. Meanwhile,
several quasi government bodies too have expressed their dissatisfaction over the
pace of progress in key areas.
Recently, the RBI blamed “policy and administrative uncertainty” for the uncertain
investment climate. Moreover, it has made its rate cut actions conditional to “credible
fiscal consolidation”. There is no doubt that the government is under tremendous
pressure to set the policy engine rolling once again.
Government under increasing pressure to tackle corruption and re-start the policy engine
Date/Person(s)
January 17, 2011,
Group of eminent
citizens
Exhortations
Excerpts from the open letter: "We are alarmed at the widespread
governance deficit in almost every sphere of national activity covering
government, business and institutions. Possibly, the biggest issue corroding
the fabric of our nation is 'corruption'. This malaise needs to be tackled
with a sense of urgency, determination and on a war footing. The institution
of Lok Ayuktas, vested with adequate powers, would go a long way in
effecting the needed correction, as is evident from the example of
Karnataka. There is a need for every State to have effective and fully
empowered Lok Ayuktas and indeed for early introduction of the Lok Pal
Bill at the national level, for the purpose of highlighting, pursuing and
dealing with corruption issues and corrupt individuals."
The second letter urged the government "to take urgent action on issues
including: land, judicial, electoral and police reforms." The leaders also
called for measures to curtail corruption.
"The biggest concern is over governance issues. There is a complete absence
of decision-making among the leaders in the government."
October 3, 2011,
Group of eminent
citizens
October 31, 2011,
Azim Premji

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Government under increasing pressure to tackle corruption and re-start the policy engine
Date/Person(s)
December 22, 2011
Prime Minister
addressing
business leaders
Exhortations
"Many of you have raised, from time to time, concerns with regard to domestic
policy. Would request you to appreciate that almost every major government
decision has to be negotiated in the larger democratic arena. This is
especially true of sensitive issues like those related to acquisition of land
and environmental concerns …
In this context, I must confess that it is a little disappointing to sometimes
hear negative comments emanating from our business leadership or be
told that governmentRss policies are causing slowdown and pessimism In
the industrial sector. Such comments have added to uncertainty and have
emboldened those who have no stake in our economic growth…
I seek your vocal and expressed support when the Government attempts
measures that you believe are in public interest. Industrial investment,
and therefore industrial growth, depends heavily on the expectations of
investors."
"The PM's point was that if all of you have negativism and are totally
pessimistic about growth, about the future, then what will happen to the
country? All of us who were present had stakes and are concerned. This is
the right time for Indians to outshine others and we have not taken that
advantage…If policy paralysis continues and agricultural growth doesn't
happen, the growth rate could slip below 7%. More and more Indians are
looking at investing abroad. But the market is in India."
"I personally expect and our company's view is that the government will
get much more active on policy initiatives post-elections, irrespective of
their results … I think if the opposition (parties) tends to be little more
constructive, it will expedite the whole process of parliamentary reforms
vis-a-vis some of the policy initiatives the government would like to take,
which is really works in process."
"The global environment is only partly responsible for the weak industrial
performance and sluggish investment activity; several domestic factors -
the unhealthy fiscal situation, high interest rates and policy and
administrative uncertainty - are also playing a role… while global factors
are contributing, domestic conditions are also responsible and a change
in the investment climate is contingent on these adverse conditions being
addressed by policy actions. Without this, a continuing decline in
investment will push the economy's trend rate of growth down, further
aggravating inflationary pressures and threatening external and internal
stability… In the absence of credible fiscal consolidation, the Reserve
Bank will be constrained from lowering the policy rate in response to
decelerating private consumption and investment spending."
Source:
Media reports/RBI/MOSL.
the
January 8, 2012,
Deepak Parekh
January 20,2012,
Azim Premji
January 24, 2012,
RBI Governor
7 February 2012
I
11

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