Four years of Modi govt: Centre needs to resolve banking mess, say CEOs

Tell Modi govt to walk the talk on promises in its final year

The Narendra Modi government should deliver on its promises in the final year of its five-year term, India Inc says, adding the development of the country must go beyond sloganeering and take into account the ground progress.

A survey of 28 CEOs from Indian companies showed that besides reforms such as the goods and services tax (GST) and Digital India, top executives were not happy with most other schemes that were launched with much fanfare in the last four years but failed to make any mark on the ground.

“No new schemes should be launched. The government should focus on better implementation of existing schemes,” said a CEO on Modi’s last year. 

While these CEOs gave the government seven out of 10 rating, they were concerned about bankruptcy cases and financial frauds, such as those involving absconding businessmen Vijay Mallya, Nirav Modi and Mehul Choksi. 

Many CEOs said the government must reform the banking sector, which is paralysed by the weight of non-performing assets. Eleven of the 21 public sector banks are facing the Reserve Bank of India’s prompt corrective action after their bad debts rose to alarming proportions.

Also, the RBI’s move to send 40 companies to the National Company Law Tribunal (NCLT) to resolve part of the massive bad loan problem had showed slow progress, they said. “The government must resolve the banking mess and expedite privatisation of state-owned firms to raise money and reduce the fiscal deficit,” said a CEO. Schemes such as Make in India, Swachh Bharat Abhiyan, Namami Gange (National Mission for Clean Ganga) and the Smart Cities Mission did not have much to show, they said. “Prime Minister Modi must hold his team responsible for not meeting his vision. They should work more religiously towards his vision. 

The development of India has to be beyond sloganeering and must be palpable,” said the CEO, asking not to be named. Several CEOs declined to participate in the survey, saying they did not want to share their views.

The CEOs also wanted an end to divisive politics and improvement in infrastructure in top metros. Almost 93 per cent of the CEOs said the launch of the GST was successful despite initial hiccups and helped reduce red tape in movement of goods. Over 60 per cent of the CEOs said their companies had benefitted from the government’s Digital India programme. Three-fourths of the CEOs said they hired more people in the last four years of the National Democratic Alliance government, even as thousands of formal sector jobs were reduced by the companies that were referred to the NCLT by the RBI under the Insolvency and Bankruptcy Code 2016.

Ninety-six per cent of the CEOs surveyed said the Smart Cities project failed to take off, while 64 per cent said the Clean India campaign did not result in action on the ground. After the first photo ops by top government officials, the campaign did not trickle down and government offices and hospitals continued to remain dirty, said CEOs. “The government must stop taking two steps forward and one back,” said another CEO. 

When asked to rate the overall performance of the Modi government in the last four years, the CEOs, on average, gave a rating of seven out of 10, with 10 being the best, which is in line with what they have been rating the government in the previous three years.  After one year of the Bharatiya Janata Party-led alliance in the government, CEOs had felt that the government had not done enough even as one year was a short period to deliver. After two years, there was more optimism as corporate leaders had said the government’s steps of bringing down the corporate tax rate, the new bankruptcy law, taming inflation and bringing down corruption in governance were top achievements. 

Last year too, they said, the NDA had managed the economy well by plugging subsidy leakages, following transparent policies while auctioning natural resources, and clearing the way for GST roll-out from July 1, 2017. Compared to the surveys of the previous three years, CEOs said they were disappointed somewhat as they want to see more change. 

“A lot more needs to be done on the ground to increase ease of doing business and reduce corruption,” said a CEO. When asked to rate the ministries, the CEOs cited the roads and power ministries as the best-run ministries, with many acknowledging the contribution of finance and external affairs in nation building. Human resources development and labour ministries, on the other hand, were considered to not have delivered on Modi’s vision.