While the stock markets have given the Modi administration’s 100-day performance a big thumbs up, but if one were to look at the results of the CNN-IBN poll conducted by Chanakya, it shows that as far as the general mood in economy is concerned, it is a little bit more measured.
Majority 41 percent do believe that the economy is back on track but almost 35 percent also tend to disagree with that proposition.
In an interview to CNBC-TV18, discuss the poll findings, Sidharth Birla, President, FICCI, said that he believes the numbers are an accurate reflection of the ground reality as expecting everything back to normal within a span of 3 months “would have been an overestimation”.
Below is the transcript of Sidharth Birla interview with CNBC-TV18’s Shereen Bhan Q: So, do you believe that the poll is actually reflecting reality which is that there is a hope rally on as far as the equity markets are concerned but while the macro economic data is looking positive the economy has not really recovered just yet?
A: We have to go back to the staring point and we were really recovering from a very bad bout of economy as well as slowdown. The gap in most of the industries, the utilisation gaps in most industries was very high when the year started. So, to expect that 3 months down the line or even 6 months down the line almost everybody will say that everything is back to normal I think would be an overestimation. So, therefore I believe that the numbers you just quoted are an accurate reflection of what is the reality on the ground. However that does not mean that we do not see a positive direction going ahead which is completely different to what we were seeing six months earlier because there was a lot of uncertainty in the air as to when things would turn and when they would head up. So, even 5.7 percent is a very good thing to have happened but I think it is still less than what one expects the whole year to pan out and therefore may be six months down the line the numbers would be even stronger towards more companies putting their money where their mouth is so to speak.
Q: A lot of that will actually depend on what this government decides to do as far as reform measures are concerned and that is where opinion is divided. You look at most market watchers, some believe that there have been incremental measures that this government has taken forward, there is disappointment in some camps that were expecting transformational change. I don’t know how one can expect transformational change in 100 days but that was the burden of expectations that this government has been carrying. Let me just read out to you what the poll is showing up and 35 percent believe that this government and the Prime Minister have not been bold enough or tough enough as far as reform measures are concerned, would you agree?
A: No I would not agree at all. I think he has been very bold as far as setting direction and decision making, resolving problems that were there in decision making, setting a direction for positive decision making going ahead are required. I think he has been very bold.
Now the issue is if we believe that we need transformational reform in 100 days or even in 180 days I don’t think that is really the need of the hour. We are just coming out of a bad flu bout and I think he needed to strengthen all areas of the body and therefore of the economy. We would have had five bold transformational announcements but then what? Unless we had these 100 broad spread implemental improvements in every area it would not have amounted to much in the long run. So, therefore I may want transformational change but I don’t think it is the right thing.
Q: One of the things that this government has been criticised and of course the opposition has gone to town criticising this government because when they were in opposition they criticised the UPA for rising prices and spiralling inflation and our poll shows up that as far as price rise is concerned 48 percent believe that this issue should have been handled better by this government. So, there is disappointment on the issue of price rise. This government has been fortunate where we have actually seen global crude prices coming off sharply which has resulted in domestic prices of petrol going down considerably, diesel of course hopefully will be market aligned but on the issue of price control perhaps reality biting this government that it is not as easy as it looks from the outside?
A: To be fair to all sides everybody whether one is in the opposition or one is sitting in the government a price rise is something that does concern all of them. So, how you deal with it politically is a different issue. Certainly I would say that we have seen good attention to try to control prices. We were in a area of uncertainty because of the uncertain monsoons and weekly forecast coming out that this is the shortage and that is the shortage and that was also creating a sort of a shortage mindset in people.Certainly I would say that a lot of money would have been made in the system by the middlemen or by the distribution. So, therefore perhaps the consumer prices have not been as tame as they should have been and certainly I think with the strength that the government came in the average man would have had a much higher expectation of price control than was really possible but I think that is a result of unreal expectations.If one was to measure what has happened versus what could have happened I think we are on a strong wicket.
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