Cabinet reshuffle deeply disappointing, say experts

Excerpts from India Tonight on CNBC-TV18 Watch the full show » Reliance Natura BSE | NSE 01/01/70 Are Mutual Funds betting on Reliance Natura?

It is still unclear whether yesterday's government reshuffle sent a clear and welcome message to corporate India or it was confusing and even disconcerting. What is Jairam Ramesh's replacement at environment by Jayanthi Natarajan held and do we have the right ministers manning infrastructure?

In CNBC-TV18's special show India Tonight, Karan Thapar, discusses these issues with the vice chairman of Reliance Natural Resources , Anil Singhvi, the group managing editor of The Business Standard, Ashok Kumar Bhattacharya and the Chairman of Oxus Investments, Surjit Bhalla. 

Below is a verbatim transcript of their discussion. Also watch the accompanying video.

Q: Let's start with the big picture, Mr. Singhvi does yesterday's reshuffle send out a clear and welcome message to corporate India or did you read it as a bit of confusion perhaps even something that is disconcerting?

Singhvi: My expectations in any case were not very high, so I am not either excited or disappointed on that. I think what one has done is basically a jugglery of the same kind of faces, only very few faces have been dropped.

However, I don't think the progress card of the government in terms of delivery of the reforms or whatever is needed to be done to accelerate the economy has really been put forward on that and we have much better team today to deliver a larger value going forward, I don't think so.

Q: So in a word, you are disappointed?

Singhvi: Since my expectations were not very high, I am not feeling very disappointed today. I was disappointed even a week back before even this was being talked about.

Q: Surjit Bhalla, the two big economic ministries Finance and Commerce and Industry remained with Pranab Mukherjee and Anand Sharma respectively, in your eyes is that a source of relief or is it a question of disappointment? Were you one of those who are hoping that either Chidambaram would return or Montek Ahluwalia and Rangarajan might take Pranab's place?

Bhalla: Independent of who would be where, my expectation was that basically the citizens of India voted this government in. This government has done precious little, indeed several negative things.

So, as a citizen, who had voted for this government I felt that there would be some relief in terms of the beginning of reforms, it is absolutely immaterial who has led the reforms. The fact remains that this government is arrogant beyond belief in terms of that they think they can be absolutely incompetent, not deliver reforms, not even mention reforms and continue to enjoy popularity. So, I am deeply disappointed by if you will the arrogance of this government and its incompetence.

Q: Mr Bhattacharya I suppose the central concern in corporate India before the reshuffle was announced was the belief that this government had lost its way and that economic governance was suffering because short term political interest were triumphing over long term economic ones. Has that concern been allayed or reduced or does it remain regardless of this reshuffle?

Bhattacharya: I personally feel that the concern still remains and as Mr Singh said that the expectations from this reshuffle from corporate India were very low because nobody expected the key economic team of Dr Manmohan Singh to change. Finance was not to change, commerce and industry was not to change and as a matter of fact you have now commerce and industry minister who is also in charge of the textiles ministry and therefore, if the key economic ministries are not changing then I don't think the corporate sector is actually expecting any major change from this team and from this reshuffle.

What has changed of course is the removal of Mr Jairam Ramesh from the environment and forest ministry to an even more interesting ministry from the corporate India's point of view, which is that he has gone to rural development ministry and corporate India must look at him with the same kind of interest as it did while looking at him as environment and forest minister.

Q: Let's split the point you are making in to two because I think it's a very important aspect of this reshuffle. Let's first Mr. Singhvi look at Jairam Ramesh's replacement at Environment by Jayanthi Natarajan. Do you see this as a sign that the obstacles Jairam Ramesh was said to have put in the way will now be smoothed over and that Environment clearance will be a lot easier to get than previously?

Singhvi: Since last couple of years, there has been a feeling that corporate India is really lagging and lacking its will to create a much bigger picture for itself and whether it is working for cross purposes as far as community and society is concerned which is not the case. I don't think we can live in this country only with kinds of Infosys and we cannot have the kinds of Vedanta.

So I think the issue is - do we need only Infosys and we don't need Vedanta. I don't think we can live without having both of them. After having realised it, we should really move forward in seeing that what needs to be done by both. Corporate houses should be made answerable too if they have really spoilt the environment and not done their social objectives.

However, I think what Jairam Ramesh did in last two years was that making out that all corporates are really floundering and flouting all the regulations in the country which is not the case. If you look at our industrial growth for last fifty years, I think we have done reasonably well; in fact far superior than what was expected in last 15-20 years.

So moving Mr. Jairam Ramesh and bringing in Jayanthi Natarajan to my mind I think Prime Minister himself being an economist realizes very well that we need to have service and manufacturing industries both. If you look at RBI's last week's pronouncement, we can't really live on service industry alone.

Also read: Will cabinet reshuffle improve govt's image? Experts answer