2004-06: CEOs give PM the thumbs up

Prime Minister Manmohan Singh's reform agenda might be running into roadblocks put up by the Left regularly.

Still, as he completes two years in office, India Inc appears reasonably happy with his management of the economy. However, it is sceptical of job reservations in the private sector and the state of the country's infrastructure remains a cause for concern.

A poll of 58 top CEOs, carried out by Business Standard across cities, shows that industry feels Singh has done well in maintaining the tempo of economic reforms, managing the government's finances, improving the business environment and stepping up the quality of governance.

The CEOs gave a score of 6.3 out of 10 to Singh for his economic reforms initiative. Though it has put divestment on the backburner and paid only lip service to labour reforms, Singh's government has given a big push to special economic zones to develop the country's commercial and industrial infrastructure and has given a boost to exports.

SCORECARD

It has raised the FDI cap in telecom from 49 per cent to 74 per cent, set in motion the privatisation and modernisation of the Mumbai and Delhi airports, raised the foreign investment limit in domestic airlines from 40 per cent to 49 per cent, permitted Indian carriers to fly abroad, allowed the private sector to invest in freight movement and permitted 49 per cent foreign investment in single-brand retail.

For managing the government's finances, Singh has got a score of 6.46. The CEOs have taken note of the fall in the fiscal deficit (see chart) in the last two years.

Finance Minister P Chidambaram has said the government is on course to meet its target of cutting the revenue deficit to zero and the fiscal deficit to three per cent of the gross domestic product by 2008-09. However, some economists feel, the task of meeting the target could be tough once the Sixth Pay Commission for government employees gives its report.

Singh has also earned kudos for keeping inflation under control, in spite of soaring crude oil prices in the global markets.

Where Singh has scored the most is in improving the country's business environment - 6.97. Several CEOs said this could be seen as Singh's most significant achievement, notwithstanding opposition from the Left parties to key policy initiatives.

"Given the coalition compulsions that exist at the Centre, this government has performed extremely well," said Chrys Capital managing director Sanjiv Kaul.

Singh has managed a decent score of 6.09 for his governance.

Where Singh has not scored well is infrastructure development - just 4.93. "The opportunities are ripe in the infrastructure sector and the world is waiting for India to open up," said Yes Bank managing director & CEO Rana Kapoor.

The prime minister had set up a high-powered committee on infrastructure, but the CEOs say there is a need to do more, especially in the area of power, airports, ports and roads. However, there has been a spectacular turnaround in the performance of the railways in the two years since the UPA government took over.

The CEOs have also raised concern over the government's social sector initiatives. The biggest concern is reserving jobs in the private sector for the socially weaker classes.

They are also worried about the rising incidence of labour unrest in the country in the last year or so. As a result, the prime minister has managed a score of 5.59 for his social sector initiatives.

"The government should not mix up economic affairs with politics," said Pfizer India managing director Kewal Handa.