Cautiously Pessimistic

There's a new man in North Block and he needs a "minimum common economic programme", a term first used by former prime minister V.P. Singh when he spoke of taking support from the Congress. Politicians have been huddled over the past week trying to hammer out this consensual—or compromise-driven, depending on the way one looks at it—economic blueprint, which even as the new Cabinet was taking oath on June 1 was far from being finalised. Outlook spoke to industrialists across the country to get their views on what this policy could turn out to be.

Dilip Piramal, chairman, VIP Industries

Logically speaking, it looks very difficult for the Congress and the NF-LF combine to have a common economic policy. This becomes apparent if one just takes a look at the election manifestos of the parties concerned. The Janata Dal has called Congress' activities 'fraudulent and scandalous'. The CPI(M) has called the Congress 'criminal'. On the other hand, however, both H.D. Deve Gowda and Jyoti Basu have been leaders in industrialisation of their states under the liberalised economic policy. Therefore, the compulsion of survival and the lure of office may make the disparate parties agree on a common economic programme. But if the United Front Government seriously pursues the various scams of the Congress government which they have highlighted in their manifestos, obviously their support will get undermined. If they don't do so, their credibility is at stake.

Ajit Gulabchand, chairman, Hindustan Construction

The NF-LF and Congress will make only one common programme, which is to take the country to the dogs. What economic programme can they create? They don't have a clue about a common economic programme. They are not even telling the country what they plan to do with the alliance. They have just announced some vague statements about their intentions. But they haven't even thought about any economic programme, let alone a common one with the Congress. There are 13 parties in the other forum. How will they ever meet on any common ground? On the one hand, Chandrababu Naidu has one economic programme, while Deve Gowda has another, and Jyoti Basu has yet another mission, and Narasimha Rao is playing his own games.

If this is the kind of support they garner, how will the Central Government ever run? This alliance's only goal has been to see that the BJP doesn't stay in power, not because of any ideological differences, but because they were scared that if the BJP stayed in power, it would have been extremely difficult for the rest to wrest control. While the BJP has a bold, liberal and forward-looking economic policy, the others don't have any idea about how to lead the country. What everyone agrees about is that it's not communalism and secularism that's going to make the difference in the next polls, it will be the economic policies that will actually turn the tide.

S.K. Modi chairman & president, ModiLuft

V.P. Singh has talked of a common economic agenda but when politicians are out of power they talk of one thing and when they form a government they start singing a different tune. P. Chidambaram is tipped to be the finance minister, in which situation it would be the case of an old minister coming in with a new hat. He is pro-reforms, as everyone is well aware.

So, whatever the government, business will be as usual. Depends on the new council of ministers and which portfolio he holds. Take civil aviation, for instance. With Ghulam Nabi Azad there was no liberalisation. Had Madhavrao Scindia been there, it would have been a different story. The days of one Rajiv Gandhi or Indira Gandhi ruling the roost are over. In Narasimha Rao's government or whichever new government comes, each minister is a law unto himself. The circus will go on with different parties pulling in different directions.

R. Seshasayee, deputy managing director, Ashok Leyland

There are three components in the Indian economic policy. First, issues where there is no choice. For instance, freedom from industrial licensing is a fait accompli and no government can reverse it. Changes in the MRTP regulations are another area in this category. No government can afford not to invite foreign investment. However, inviting private investment in the infrastructure sector would fall into the second category, where the government can decide whether the private investor should be an Indian or a foreigner or maybe a combination of both. In the last five years, we failed to attract enough investment in the three vital sectors—roads, ports and tele-com. Had we succeeded in getting adequate investment in these sectors, the economy would be on autopilot.

Thirdly, the recent election results clearly indicate that politics is going to resemble the coalition at the level of the society. It also means that regional and social interests precede economic interests. Hence, one cannot expect the new Government to be oblivious to this reality. If this political reality could get transformed into fiscal autonomy for the states, that may well guarantee 4.5 per cent to 5 per cent growth. The lack of fiscal discipline at the state level is largely due to the actions of the Centre. The political verdict clearly states that there cannot be one set of principles common for the entire country.

Ajay S. Shriram, vice-chairman & managing director, DCM Consolidated

A minimum common economic agenda might just be possible even with the Left-inclined parties because if you look at the various states in which these parties have been in power, the chief ministers have all been talking of economic development and industrial growth. Whether it is Laloo Prasad Yadav in Bihar, Deve Gowda in Karnataka or even Jyoti Basu in Bengal—they have all been abroad inviting foreign investors to put in funds in their respective states.

If there are 15 or 20 items on the economic manifestos of different parties, there might be one or two items on which parties disagree: like you point out that Janata Dal is against pri-vatisation of PSUs or is talking of reservation in the private sector. But as far as foreign investment, industrial growth, agriculture growth, revenue generation and employment generation are concerned, I don't think there is any ambiguity or confusion. Everybody will work in that direction. Politically, whether the Government will last remains an open question. One thing is for sure. Politicians themselves are not keen to go back to the electorate. This might be enough reason for them to stick together.

Mukesh Gupta, vice-chairman, Lloyds Group of Industries

All this talk about the common economic agenda is basically rhetoric. However, I don’t think much will change. The parties in their own states have adopted quite a liberal attitude towards business. Look at West Bengal and K a rnataka— both states have fallen all over themselves to invite foreign participation in infrastructure projects and other high technology a reas. I think the times will dictate that they don’t regress from the open economy logic. Much will depend on the finance minister. Frankly, it’s anybody’s guess right now as to what may happen.