CEOs say NDA reforms on right track, barring some misses

Neotia says the seeds for growth have been sown but might take a while to bear fruit, talking on the effectiveness of the Make in India initiative. In the global context there is overcapacity and companies may not immediately get wooed into investing in India until global economy stabilises, he adds.

On FDI, where over 40 percent of the participants cited exemplary international diplomacy, liberalisation and the Make In India as key driving force, Kidwai believes the FDI we are seeing right now is just the tip of the iceberg. Below is the verbatim transcript of Naina Lal Kidwai, Sourav Majumdar, Gokul Chaudhri, Rajeev Dimri & Harshavardhan Neotia's interview with Shereen Bhan on CNBC-TV18.

Q: Take us through the methodology, the time spend on conducting this poll. This poll was completed before things like the bankruptcy code were passed through by the Parliament, so that perhaps is not reflected in the poll.

Chaudhri: You are right. We did this poll over a period of three-four weeks and that ended up two weeks ago. This was just before we had the Parliament passing the bankruptcy code, which was much awaited and also before the Mauritius-India protocol got signed, which has led investors to find greater certainty as far as the treaty is concerned. So those announcements happened after the poll was done.

Q: Do you believe that the poll would have reflected very different numbers or would it be along expected line, which is what the key finding seems to suggest?

Dimri: It would not have materially altered, so while these are two important developments as Gokul is talking about but they would not have materially altered the overall sentiment. However, for few investors these are extremely big events but in a sense it passes certain message in the market, so I do not think the findings of this poll are materially different from what we would have expected.

Q: Let's get to it now. The first question that we ask as part of the CNBC-TV18 and BMR CEO Poll, are you satisfied with the steps that the government has taken to create an attractive business environment. A resounding majority 67 percent saying yes, 29 percent saying no and about 4 percent are undecided.    

If one would have talked to industry leaders in private, at least at the start of the year the sense was that there should be much more momentum but that feeling now, I get a sense, has changed; there is now perceptible difference when one talks to business leaders. There is a sense of confidence about the turn that the economy seems to be taking. So, your comments on the two years that have just concluded and the attractiveness of the business environment today.

Neotia: I think they have been rather good two years of the government from an economic standpoint. I think the government started off with a very clear vision of trying to build the foundation of what they thought would be a robust economic future for the country and they looked at ease of doing business, they looked at investment in infrastructure, they looked at various other issues that are critical for building blocks of the industry and development and all of that and whether it's the fiscal deficit target containment or looking at taming the inflation numbers etc. So I see that all these different activities that have happened over these couple of years are now coming to a point when they should start yielding fruits. It's like the tree being planted and then takes a while to grow and then the fruits to come. We have had two bad monsoons, so that has been a bit of a dampener. God willing this monsoon, hopefully as it seems to be predicted, would be normal and if that is the case I do see a very strong uptick happening from October onwards.     

Q: So you are expecting a significant liftoff in the economy starting October and that is the sense that we are getting from other business leaders as well. You just heard what Mr Neotia had to say. If I were to ask you to summarise for us how you would assess the performance over the last two years, on the macros, clearly, the government has done a lot of costs supported by the fact that oil prices have come off significantly and also, in terms of long-term structural reforms, perhaps not visible in the short-term but the foundations have been laid, how would you summarise the performance?

Kidwai: It is in your question and I would agree that the foundations are actually well set. Initially, a lot of announcements and some disappointment in the early period that things were not happening fast enough, but I do believe we are beginning to see the outcome, all of which are happening now in terms of the very significant development on the bankruptcy bill, the real estate bill also is important in terms of creating a very healthy real estate environment going forward. The bankruptcy bill itself will play out over time, but directionally right. Clarity on Mauritius, which was looming large and its good that we have got that out of the way and infrastructure which fortunately, now at least we are seeing some parts of infrastructure moving ahead. Roads is of course a great story, rail coming back on track and in fact, looking quite interesting going forward in terms of private public partnerships (PPP) that may come up there and the power sector, where whether it is renewable or indeed traditional power, there is movement ahead. And all of this leads and contributes to growth going forward._PAGEBREAK_

Q: You are absolutely right, you have listed out a lot of the achievements that this government has been talking about and some of that is reflected or will be reflected shortly as we proceed with the findings of the poll. You have talked about the Ujwal DISCOM Assurance Yojana (UDAY) scheme, you have talked about infrastructure and you have talked about some of the high performing ministries. But let me come to you with the second question that we asked. We said, are you satisfied with steps to end tax uncertainty.

Now, here is an interesting result because the first result, 67 percent said yes, the government has done enough to create a much more conducive business environment. But here 43 percent are satisfied where 37 percent are not satisfied with the steps that the government has taken to end tax uncertainty. So, in a sense, tax continues to be one of those pain points for this government.

Majumdar: I would agree with you and I would agree with the results of the poll that by and large if you look at the macro picture, we have had a situation where after the first year of announcements and all of that, things are beginning to play out. But, yes, tax remains one of the uncertainties and somewhat surrounding, some of these tax announcements remains a pain point because there needs to be a lot more clarity from the finance ministry and the government, while generally nobody disagrees with the fact that this government is business friendly; there are some nasty surprises which keep springing up once in a while and that is what is spoiling the narrative for this government. And that is what they need to work on.

Q: So, are you surprised with the fact that 37 percent are not satisfied with the steps that have been taken to end tax uncertainty?

Chaudhri: When we were doing this survey we ask two questions. One, are you satisfied with the remedial measures taken by the government. Talking really about the legacy that they inherited and the legacy was not just the Vodafone case, which continues to be troubling the government, but also a huge number of transfer pricing cases, a number of litigation. The backlog is quite profound and the government has taken measures which are reflected by some part of the survey, but there was expectation that the undo over the past would be done far more quickly.

Q: This has not happened at this point in time. But even that conciliation window that was opened up in this Budget, no takers so far, so, even if we talk about remedial steps or measures, the efficacy is yet to be proven.

Chaudhri: True and I wish they had placed a few more liberal guidelines into that scheme to make it a little more attractive and workable.

Q: Rajeev?

Dimri: One way to say it 37 percent are satisfied. It is 1/3rd satisfied, 2/3rd not satisfied. So that is how at least I looked at it. In the conversation that we had with people while conducting the survey, there are two aspects. The one aspect is on the law and second aspect is the implementation of the law. A lot of unhappiness is on the way the law gets implemented rather than the law per se.

Q: So the administration side worries continue?

Dimri: Yes

Q: So there hasn’t been much change that’s happened on the ground?

Dimri: That’s the experience so far.

Chaudhri: But credit to the government, from a policy perspective, from administrative circulars, from providing out guidance they started the momentum on it, but I think a lot still needs to be done.

Q: All right, let’s now talk about the best programmes to create long term growth that was the next question that we asked and it’s no surprises that the number one that has emerged in terms of the programmes that will hopefully create long term growth, “Make In India” followed by the Jan Dhan Yojana, Skill India coming it at number 3, Digital India coming it at number 4, Start-up India at number 5, Irrigation and Crop Insurance at 6. Let me start by asking you, there has been so much that’s been made about Make in India so on and so forth, yes we have seen FDI numbers go up, domestic private investment is yet to take off, because obviously it’s going to chase demand and demand continues to be tapered at this point in time, but do you believe that enough has changed on the ground despite all the hoopla around “Make in India”?

Kidwai: There is a mixed story there, one of course is if demand goes up, capacity utilisation goes up and we will begin to see investments, but let not forget that a lot of the push is happening now at the states level and where industry and where rubber really hits the road is at the state level and each state in the spirit of competitive federalism is reaching out to industry, but the record of each states is really a mixed one. Some doing better than others and that is where there is more work needed, so that India as a whole is seen as a friendly business environment.

I think the second area where there was a lot of hope is in the whole area of defence which has been quite a slow starter in terms of clarity and what was required because, in fact, the Make in India work and investment around defence would indeed be huge. I think in terms of just a third, I would add that we have seen regulatory overreach if I may say in many sectors which are proving to be quite negative for the sectors. Pharma most recently in terms of price control and I can understand where it comes from, but it beginning to hurt pharma in terms of domestic production. We saw what happened in the food front and indeed across sectors where regulators need to be a lot more “pro business” even while they look at consumer interest.

Q: No, you are absolutely right and let me use an example of a story that we broke here today, when we talk about the Make in India context. Tim Cook was in India here looking and setting up stores in India, Apple has applied under the single brand FDI policy to set up its own stores in India, now the government, Department of Industrial Policy & Promotion (DIPP) inter ministerial committee had actually recommended that yes Apple should be given a waiver from the 30 percent domestic local sourcing norms, but now we find out that the Foreign Investment Promotion Board (FIPB) doesn’t agree with the DIPP inter ministerial committee or with the nodal ministry that’s the Department of Electronics and IT and in fact, the FIPB believes that no such waiver should be given and this ties in with the government’s idea of Make in India. Do you believe that we are sending out confusing signals and confusing messages here or are we also perhaps at some level tying ourselves up in knots over this Make in India business?

Neotia: No, I think the way I look at it is that this is all about seeing that we have a level playing field between international operators coming into India and Indian people or Indian companies operating. So everyone is looking at some of these legitimate concerns that are propping up and I am sure that in a few weeks or months they will be able to find a ground which is suitable and reasonable from every point of view, but having said that the way I look at Make in India is there it is certainly a very important initiative for a long term prospects of India.

In the short term it may take a little longer to really get Make in India the big story that its intended to be because we must remember that the world has been slowing down and there are overcapacities of almost every single product across the world and if that is so this is probably not the right time where everyone is going to jump to adding manufacturing capacity. One of course is the defence sector that Naina talked about which certainly one of the sunrise area as far as India is concerned, but in other sectors it will happen, it must happen and I think it will happen also because India will be a very large market with still relatively cost effective way of manufacturing, but it will be a little longer story it may not happen as quickly as probably some of us imagine because of the situation that we are in the global context in which we are placed presently.

Q: Would you rate this any differently, would your top programme be Make in India as I said Jan Dhan at 2, skills at 3, Digital India 4, Start-up India 5 and Irrigation and Crop Insurance 6. Is that how you would rate them as well?

Majumdar: Well, I think Make in India apart I would definitely feel the Jan Dhan Yojana is being a major game changer, can prove to be a game changer going forward. Of course start-up India is another major one if you really focus on these areas, because in the absence of organisational job creation growing in the manner in which it is supposed to start-up and entrepreneurship is going to really hold the key to creating of new jobs and otherwise where are the jobs going to really come from. Digital India, skilling India in fact are in a sense linked to Start-up India, particularly the skilling aspect of it, we need to really look at these programmes. The good thing I feel about this government and the two years it’s been in power is that though we have talked about, some of these they have really done with missionary zeal. You may have thought about it initially as just programmes being announced and branding and all of that, but they really put their might behind many of these programmes and we are now going to slowly see these things playing out. I would definitely rate Start-Up India and Jan Dhan as one of the key programmes there.

Q: How would you rate these programmes and do you concur with the poll finding?

Dimri: Yes, in the conversation that we have with people the emphasis was what is likely to provide the long term fiscal benefit and that’s what the people were focussing on and if you look at these programmes, the Make in India programme has the potential of touching lives across the board. While the other programmes are all good, but they tend to touch fewer lives important of course, but Make in India gets into the whole from the grassroots to the top end and that I think is the reason why it has made number 1.

Q: So long term implications of Make in India ensuring that its number 1 there?

Chaudhri: Absolutely and in our conversation with various respondents, it’s not that we came across any programme which they felt was on the wrong track, so while you talking about everything that’s going right, it wasn’t that corporate India felt that there is something with the government really embarked on a large scale, which is negative. In that sense it’s also in the positive that most of the programmes are well directed._PAGEBREAK_

Q: We are now going to talk about the best performing ministries and no surprises there that the key economic ministries have found their way into the best performing ministries lists. So, it is the road and highways, power and coal, defence, finance, and railways. Those are the best performing ministries as per the poll. Let us just bring up finance minister Arun Jaitley because of course, one of the key minds in this government not just looks after the economic aspects, but also looks after the political dynamics.

If I were to ask you about the crucial pieces of legislation that have been pushed through by this government a lot of them are economic legislations driven of course, by finance ministry. The bankruptcy code we have just discussed, the big hope is on the GST now. The finance minister in his interview telling me that enough is enough and they hope to go ahead and get the congress on board, but if the congress does not come on board, they hope to push it through in the next session of parliament. How would you assess the performance of the finance ministry?

Kidwai: It has been quite stellar in terms of some of these new bills that have found their way in. The issue of course remains around tax which we have seen from your survey as well that industry certainly believes from the survey that more needs to be done and that would fall squarely in the finance ministry. So, I hope that they would give that some attention. And in terms of also, the way India is positioned offshore, responsible in terms of maintaining the fiscal and not having succumbed to some of the asks around maybe loosening up there, are all indications that India is held in very high regard today because we have shown good sensible fiscal policies as well. So, I would say all in all, very good.

But if I might just come in here on this issue of economic ministries, the key as in most cases is inter-ministerial issues and there this government has done a good job about the coordination. But there are areas, and I will give you an example, if you look at the power sector, a big push to get the power equipment cheap and therefore, we saw Chinese power projects or Chinese power equipment coming in. Then that got stopped. BHEL dropped its prices, but in the process, other power manufacturers in India were rendered uncompetitive. And we do not want to kill sectors when we are looking to provide cheap power to our people and therefore, we want cheap power equipment, but in the process damage what has already been made in India. And it is this working between the heavy engineering ministry, how BHEL behaves within that, what are we doing to create an enabling environment for existing players that this inter play between ministries becomes quite important to watch as well.

Q: You are absolutely right on that front. In fact we have Piyush Goyal’s face on the screen, so let me just give you an anecdote. In the conversation that I just had with him, Piyush Goyal telling me that this is not a government that believes in doing business through files, it is a government that believes in picking up the phone, talking to each other and getting the job done. So on the issue of Piyush Goyal, let me as you because a lot of things have been done both across the power ministry as well as the coal ministry. Of course, coal production at a record high. Coal India’s performance again at a historic high. If you look at the UDAY scheme which has been rolled out now, 18 state governments have come on board, signed up for the UDAY scheme. How would you rate the performance of the coal and power sector?

Neotia: In one line, outstanding. In the short period, they have done some incredible amount of work. I was recently going through a brochure that listed out the achievement of the power and coal ministry and it looks very impressive what they have been able to achieve right from electrification down to the village level finding a solution to ailments of the distribution companies (Discom), looking at bringing affordable power, putting transparency into the mechanism of allocation of scarce resources, etc. It has been a very comprehensive and extremely worthwhile productive tenure of Mr Goyal.

Q: Let us talk about Monohar Parrikar and you talked about the issue of defence projects not taking off as quickly. Even the new defence procurement policy which was meant to be announced last year finally has only very recently been announced. So, there has been a sense that perhaps it has taken longer to get the policy in place. But also a ministry that is dealing with a lot of legacy issues, a lot of the ghosts of the pasts. Manohar Parrikar also coming in as one of the best performing ministries of this government. Your take on Manohar Parrikar on the defence ministry and how it is now addressing this opportunity.

Kidwai: Clearly on the right track. It is not easy to get a whole new sector into a private sector attractive mode. And the whole ministry, all the way down the line needs to move. I do think that a lot needs to be done there. I would actually really see it as a ministry that is beginning to grapple with the issue but we have not really seen it happening at the levels that the expectations were. And unfortunately, tied into this is the whole issue of the state of our banks and financing. So, for some of the companies that had entered into the areas of defence, the whole issue of government being very, it will pay finally, but it is a very slow pay master. And when this happens at a time when industry itself is overleveraged and needing the liquidity and money, it does not help. So, government’s own record and speed of payment in all ministries including when we go into large projects in defence is going to be something that is addressed alongside all the regulations as they are sought to be changed.

Q: Let us now talk about Nitin Gadkari and there is consensus that as far as the roads and highways ministry is concerned, there has been significant momentum. In fact a lot of the uptick that we are seeing in the economy is largely on account of the backlog or the stalled projects that have been cleared in the roads and highways sector. How would you assess it?

Majumdar: I would definitely agree with this because Nitin Gadkari has done a marvellous job and if you speak to some of the large CEOs of some of the largest banks, even they will agree that the roads sector has really been able to free up a lot of the legacy of the past and get some projects moving. And if you see the figures of the new roads, the kilometres, etc. the story speaks for itself. Nitin Gadkari deserves definitely a big pat on the back for the way he has worked for the last two years.

Q: Absolutely. Record adding of kilometres everyday under Nitin Gadkari. So, a lot of changes to the model concession agreements and so on and so forth to clean up the backlog and the stalled projects. You comments on the lists so far?

Chaudhri: The combined effect of what we are seeing in defence, what we are seeing in roads and ports and we are seeing in power and so forth, all of that collectively was reflected by the fact that 60 percent of the respondents are very happy with how the infrastructure policy is moving. And that is quite a shift because the last two years of the UPA government was all about policy paralysis. And now, we have got a situation where 60 percent are reflecting their satisfaction with the momentum that is being built up.

Q: Infrastructure really clearly the big positive, Emerging India.

Dimri: It is a big positive, but I will like to make a comment in the conversation that came up that ministry of defence has always been important, but it was never considered in the economic world. It was something that happened, it was never in public scrutiny. So, from the start of the defence production plan, in a very short period of time for them to emerge in the economic scenario as one of the five top performing, that is incredible and I hope this continues, because it is the make in India programme is also usually linked.

Q: I guess you could stretch that logic to apply to the railway sector as well and Suresh Prabhu of course is trying to turn this massive behemoth around. May not have met the numbers of the targets that he has set out for himself, but at least directionally, has set out now a 5-15 year roadmap of where the Indian railways should be.

Dimri: That is what is adding to this so much excitement and expectation around Make in India. It is not just a tax incentive led programme. If it has got the backing of defence and various other themes, somewhere these things are interlinked and that was interesting part in our finding.

Q: It is going to be crucial for ministries like the railway ministry to really kick start their Capex plans and significant amounts of money involved there which is also going to benefit or have a multiplier impact as far as the economy is concerned. And it is not easy turning things like the Indian railways around, but as I said, at least directionally now, we seem to be on a clear path.

Kidwai: And not just a clear path. The fact that we have actually welcomed investment. So, we are going to see a lot more foreign companies in these spaces being able to come in do projects with the railways and there is a lot of interest offshore and with the few suppliers that exist in India in terms of at the edges beginning to partner and engage with the railways in allowing this momentum to move forward. We are also seeing activity on the freight corridors which is very important and let us not forget that the railways at the end of day are going to give us a cleaner environment too which is one of the cleanest transportation mechanisms in the world. And India has ignored it, at its peril for all this time.

Q: We also asked our respondents - what has lead to the rise in foreign direct investment (FDI). Remember, FDI is higher by more than 30 percent year-on-year, of course services continues to be the lead but money coming into the manufacturing sector as well. The numbers one response that comes in - 45 percent say exemplary international diplomacy is the reason behind the rise in FDI followed by FDI liberalisation, Make in India and all of the above.

Prime Minister Modi wins this hands down, exemplary international diplomacy, all the foreign visits, making the sales pitch to global investors is showing through in the poll?

Kidwai: Yes and the global outreach that India has seen under PM Modi is quite unbelievable. We have seen many of these multinational companies, on his trips, falling over them to meet him, initially with a little scepticism but overtime giving India another look, see and a chance and it is evident in terms of the number of global CEOs who have come to India in response to some of these outreach. So I think in this we only seen the tip of the iceberg and there is more to follow if we can stay the course and continue to not just be the country because of demand as demand begins to return but also in terms of ease of doing business.

Q: Linked to that is also the question that we ask - what has improved India's economic credibility. Liberalised FDI policy comes in at number 2 and even on the question what has lead to the rise in FDI, liberalisation of the FDI policy comes in at number 2. A lot has changed on the FDI front. You think that these changes have of course been meaningful and that is what been reflected on ground?

Chaudhri: We had a situation where insurance, for example, telecom and defence etc, these had sectoral caps and this government has gone forward, removed those caps. It has moved some of the smaller issues; market place e-commerce for example, medical devices. So, significant amount of movement across sectors on the FDI side. However, last October-November they also moved on liberalising some of the norms around real estate for example, so a lot of that stuff has helped build momentum sector wise.

Q: Anything left on the FDI agenda that needs to be push through?

Chaudhri: I think we are going to be seeing very carefully as to how, for example DCNS is a large submarine manufacturer in France is applied for 100 percent FDI permission in the defence sector to manufacture submarines in India.

Q: That is going to be the test case.

Chaudhri: That is going to be a test case we are going to see here.

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Q: One of the questions in the poll was what has lead to better ease of doing business ranking and at number one comes in the single window clearance. At number two comes in the non- adversarial tax regime at 39 percent. This doesn't add up if you look at the tax uncertainty issue that we dealt with earlier. I want to correct the number, 43 percent said they are not satisfied with the environment as far as tax certainty is concerned. So, even when you talk about single window clearance, it's incumbent on state governments to provide most clearances, not really the centre. How do you align this? Have things changed on the ground even as far as the states are concerned?

Neotia: They are certainly changing. I think the states also recognise that in this environment if they are not competitive, they will have a problem in attracting investments and as Ms Kidwai said some states have moved forward faster and some are lagging behind and some are trying to catch-up very quickly. So there is a mix story there but having said that there is a movement in states to fix their problems, to fix their complicated procedures and make them faster.

Q: How did CEOs spend their time in the last one year? 59 percent said they spend most of their time on management decisions. 41 percent said they spend most of their time or spend some of their time on legal decisions. 39 percent said spend some of their time on tax issues, 22 percent spend very less time on dispute resolution. 41 percent spent little on or no time on labour issues. What did you spend most of your time on?

Neotia: I think this is a time when we all have to become competitive in an environment where the margins are shrinking. I think everyone has been focusing on cutting down cost and bringing in efficiencies and improving the quality of the product because we are looking at a competitive market space. So that has been the focus. Of course there are issues as far as new projects and getting all the clearances and permissions, but as we have discussed we have moved a lot forward from where we were and we are still 100 plus in the ease of doing business ranking in the world. So we need to move down to below 50 as the government has set itself the target, so we have some distance to go but what is encouraging is that we are moving in that direction rapidly and I do hope that in a year or two we should breach 50 ranking mark.

Q: You are sitting on the boards of several companies. What are you spending most of your time discussing?

Kidwai: It is pretty much as Harsh has mentioned, so I would agree with all of that. I do think that there is a lot of energy being spent on understanding regulations because regulations are changing very fast; they are changing across the Companies Act, there are whole new ways of having -- everything from appointment of auditors to what needs to be disclosed in terms of related party transactions etc, so companies are often struggling to keep up with regulations for the first time even as the implementation goes and that translates equally from industry to industry; industries like pharmaceuticals have had a lot of changes coming from the regulators and some of it has not been very positive. So looking at how that impacts the businesses, is all taking a fair bit of time. So certainly the lawyers are very busy but corporate, senior management, boards are quite busy looking at the implications of some of these and unfortunately not all of it is positive.   

Q: Not just lawyers, tax advisors are pretty busy as well. I have two of them sitting here beaming in the studio. You want to comment on this?

Chaudhri: It has been a season of a lot of legislation and no doubt the credit goes to the government for having pushed through a number of stuff. But all of that then has to flow down into rules and procedures and guidelines and a lot of stuff that goes in and companies need to adapt their accounting systems need to adapt and a lot of processes need to be adapting. So, yes it is a time, as Ms Kidwai said which keeps a lot of people busy.

Q: Let me talk about some of the hits and misses. We have discussed the hits already, programmes like Startup India and so on and so forth. But, let us talk about the misses. The GST rollout, of course right at the top of that list. That of course is now a casualty of politics so let us not go down that road. But PSU disinvestment has also come up as one of misses. There is now a process of correction that this government has undertaken. The Niti Aayog has been set up to look at strategic disinvestment and that plan should be cleared by the Prime Minister's office shortly, is what Amitabh Kant told me in an interview. Do you feel that perhaps now, there is a degree of much more courage, especially when it comes to strategic disinvestment?

Majumdar: You are absolutely right and Amitabh Kant is now in the Niti Aayog and he has been given the task of looking at a disinvestment plan and put it in action. I think the last two years, while there was action on the other fronts, disinvestment has been, it has been a relatively low performance area and I think that what they are looking at now is to get cracking on that front because that is going to really yield a lot of revenues if done right. And we cannot keep as we have kept saying in other programmes here as well. We cannot keep waiting for the right time in the market and all of that.

So, there needs to be a concerted plan. We also need to now look at the banking non-performing assets (NPA) as an area of serious challenge and we need to, the government I am sure, has been looking at it and has been giving its attention to that. To the earlier question I would like to add just one thing about how CEOs spend their time. You will notice that the CEOs are spending less and less time flying to Delhi and that has been an important area where we need to discuss that while it is a business friendly government overall, you do not really have CEOs flying to Delhi. So, that is an interesting achievement in a different sort of way. So, we need to recognise that.

Q: Absolutely. It may not be good news for aviation companies, but it certainly is great news when it comes to governance. But I also want to pick up on this point. You were talking about banking reforms and that has actually got a thumbs-up on the poll. The Banks Board Bureau has been set up by the government. Now, of course, the process of cleansing has started. It is going to be a painful and a long process. But that has gotten a thumbs-up. But on labour law reforms because again there was a lot of hope that when this government came into power, they would push through with labour law reforms, but like the land reforms, this government has thought it prudent that let the state government address issues like land and labour. Would you agree?

Neotia: I think so. I think that is a very wise step because every state has its own challenges and they have their own politics and they have their own priorities. I think, to have one national policy, one shoe fits all sizes kind of approach, at least on matters like land and labour which has a lot of local sensitivity involved may not be the best idea. It is best for the states to do it. And in the environment of competitiveness and cooperation that is being set up between the states, every state will find its sweet spot, will find what it can do to attract investment and they will work towards that. That was a good move and that is the best way this can be resolved because getting a national consensus of all states to one policy would be very challenging.         

Q: Despite all the controversy around Raghuram Rajan and disagreements between the Finance Ministry and the Reserve Bank of India (RBI), its seems very, very clear that while CEOs can quibble about interest rates being high, the government and the Reserve Bank at least seem to have worked to improve the macros and that’s reflected here in the poll?

Kidwai: Very clearly and let’s not forget that bringing inflation under control has very serious implications in the positive for industry and also for currency and clearly on both these fronts we have had a very good showing as the Indian Rupee goes and also in terms of bringing inflation under check and while lower interest rates would have possibly helped Indian industry had they come in earlier. The fact is that even when they have come down the transmission has really not happened at the rate that it could have. The health of our banks is really stood in the way in terms of enabling that transmission. I would think that we have done well. There has been reasonable liquidity in the system and at the end of the day some of those parameters have certainly helped in the longer run.

Q: I also want to pick up on the other aspect that has shown up on the poll, at number 4 tackling corruption and red-tape 3.2 out of 5 that’s the rating that has been given. Sourav was talking about how CEOS don’t need to make visits to Delhi and so on and so forth, there is an improvement as far as governance is concerned and that seems to be showing up even on the poll both in terms of corruption as well as red-tape?

Neotia: Certainly, I think the corridors of power are fairly not a place where you find CEOs hanging around and clearly the government has put very, very strict emphasis on putting transparency as has very important agenda of governance and one has seen a tremendous amount of movement there. Of course, it’s a huge country and at the state those issues are again going to differ from state to state, but at least at the central level one has seen a huge positive move towards transparency and almost if I may say elimination of corruption.

Q: Coming in at number 7 at the bottom is, steps to bring back black money getting a rating of about 2.4 on 5. Do you think this is really a case where expectations have been sold so high by this government you will get Rs 15 lakh in your bank account and so on and so forth, while actually measures have been taken, there is an SIT, a black money law, a new law has been passed by the government, but you had just sold the story so much more than you can deliver on?

Chaudhri: Very true, I think the government did and has done what it could in the given situation. Also to be recognise is the fact in the weeks just leading up to the survey was the Panama Papers and all the stuff and that took people by surprises, all of it still seems to be happening and sitting out there and there doesn’t seem to be enough of a discovery process that not just India, but governments around the world seem to be able to deal with this. In the context of this the question is has real money been able to be retrieved back which was the expectation that’s built up and I think the answer is no, it’s not there.

Q: So two years over the start of year 3, what would you like this government to focus on the number one priority for you?

Dimri: Looking at the survey and I am talking from economic perspective that people’s expectation and what they are excited about are not big things, they are small things like ranking improvement, single window clearance 65 percent responded. It’s not that a huge expectation and big fixes are required, the small fixes are required and if that is focused upon a lot of the mood and the ranking and the environment would change materially.

Q: That’s the point I seem to be picking up as well that now this business of announcing missions is over, it’s time to get down to execution and action. NITI Aayog is going to be doing a monthly reviews, submitting its reports to the Prime Minister Office, so it’s really going to be about how these programmes are impacting people on the ground in the run up to 2019 that’s perhaps is going to be the focus starting year 3?

Majumdar: Absolutely, you are absolutely right the year 2 is over now, year 3 begin and this is the time when you need to now work on executing the big programmes and the policies you have announced. I also would like to see the government reach out a little more and the opposition and government worked together in clearing some of these pending reforms like the GST etc, much quicker so that that makes a major significant addition to the growth rate. Some of these things I think (a) execution and (b) working together on the basic minimum agenda for taking growth and governance forward.

Q: Key priority for the government starting year 3?

Neotia: One of the things is that feel good factor is not about the government’s priority. Some good news coming in terms of uptick in investment cycle, improved consumption and improved manufacturing etc. I think good monsoon is something that we are waiting for and that might provide the trigger for a very, very positive sort of investment cycle. I think the private sector is waiting for some good news to start their investments and to start talking about India’s growth story in a much, much more positive manner. So that’s something that should happen and we are all waiting for that to happen.

Q: You get the final say on the show?

Kidwai: I would agree with everything Harsh has said, but just add that some of the social programmes that have been embarked on are equally critical in terms of taking India forward, sanitation, Swachh Bharat, the Jan Dhan Yojana all well on track and just that as we go to bring this feel good factor back on track that we don’t let the distractions that has happened with extreme elements that questions the very fundamental nature of India in a way that causes the disruptions in Parliament and then put the whole agenda on the back on the back foot. I think rallying the troop, rallying the party around common agenda of taking India forward is very, very important and not allow the distractions that creep up to get in the way.