India Inc pitches for consistency in policy making despite complexities of coalition rule

The BJP, which leads the ruling NDA, fell short of securing a simple majority, diverging from earlier projections of a comfortable victory.

A day after Narendra Modi secured his third straight term in office of the prime minister, continuity in reforms and consistency in policy decisions despite the complexities of a coalition government emerged as the key concerns for India Inc.

Many senior executives that Moneycontrol spoke to shared hopes for the new government to prioritise infrastructure development and domestic manufacturing in crucial sectors through initiatives like production-linked incentives.

The election results on June 4 came as a surprise to many, as the BJP, which leads the ruling National Democratic Alliance, fell short of securing a simple majority, diverging from earlier projections of a comfortable victory, as well as failing to reach the level it had secured in 2019.

Maruti Suzuki Chairman RC Bhargava expressed confidence that policies pertaining to manufacturing and industrial growth would endure. “I see no reason why policies relating to manufacturing and industrial growth would not continue and be strengthened,” he said.

"The results were slightly surprising, but there will be no impact on manufacturing in the electronics industry… There is a national consensus that the impact of this industry on the economy is huge. We expect PLI schemes to continue to play their part to help various segments within the industry,” a top executive at a leading electronics manufacturing services (EMS) company told Moneycontrol.

Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd, a contract manufacturer of smart TVs for several multinational brands, stressed on the importance of stability and conducive policies in the electronics industry. “We look forward to a government committed to fostering innovation, streamlining regulations, and investing in infrastructure.”

Marwah also called for a reduction in the goods and services tax (GST) on televisions (TVs) and air-conditioners, asserting that such a move would further propel the sector’s growth.

"We don't see any discontinuity of policies and schemes for the electronics sector. It should remain good for the industry. We are positive as an industry and the company," said Rajesh Agarwal, Director of Bhagwati Products Ltd, the contract manufacturer of smartphones and feature phones.

India’s semiconductor industry also anticipates the continuity of economic reforms to bolster the ecosystem. “Over the past five years, the administration has implemented economic reforms fostering growth, particularly in the semiconductor and electronics sectors. We anticipate this trend will continue, contributing to the VIKSIT Bharat vision and making India a developed nation by 2047,” Ashok Chandak, president of the India Electronics and Semiconductor Association (IESA), said.

Pradeep Aggarwal, founder and chairman of real estate developer Signature Global, expects the new government to sustain its focus on infrastructure development beyond metro and large cities, citing their multiplier effect on the economy. He expressed hope for the extension of income-tax (I-T) benefits on home loans in the new I-T regulations and urged the government to address challenges faced by the real estate sector, including easing the burden of GST on both developers and consumers.

"Existing policies may continue as it is, however, new policy implementation may be slower, which could impact the economy. The government should maintain the momentum of growth. In the global scenario, manufacturing leadership and Make-in-India plans should be continued, otherwise, it can adversely impact the economy. It could have a long-term impact if we do not remain aggressive," said Aneel Gambhir, CFO of courier company DTDC.

Several CXOs Moneycontrol spoke with adopted a wait-and-watch approach, describing the situation as “slightly uncertain” and anticipated gaining clarity in the coming weeks.

“The challenge that looms due to two political blocs of alliances is that there can be a risk of instability. However, it is best for now to observe how things unfold,” remarked a top executive on the condition of anonymity.

In a social media post, Sajjan Jindal, chairman at JSW group, reflected on the unpredictability of public sentiment in a vast country like India. “Very difficult to gauge the mood of the public in a vast country like ours. This is amply clear from today’s numbers! What we are witnessing today is something nobody expected and showcases how a democracy of our size functions.”