No Thank Yous For The PM

BUSINESS confidence indices touch all time lows. Industry can't shake off the recession bug. Exports are stagnant. And inflation continues to mount.

All indicators of an inert coalition government. "We had high hopes from the government, but there've been no changes in policy," says a Delhi-based industrialist. Adds an investment banker: "The government is doing nothing to push big infrastructure projects which could kickstart the economy." That perhaps is being too critical, for it was only last month that the government finalised the concession agreement for private road projects after 14 previous drafts had been rejected.

At Prime Minister A.B. Vajpayee's first interaction with industry, at the CII's annual general meeting in April, he made 10 pronouncements. And it seems he has kept his word on at least half of them .

Last month he did even better. Scarcely had Vajpayee announced his intention to go through with some new initiatives—buyback of shares, increasing the creeping acquisition limit for promoters, and doing away with government approvals for inter-corporate investments—at the annual general meeting of FICCI, that he got them cleared by the cabinet within two days. FICCI president Sudhir Jalan, for one, is impressed. "Initially, the BJP government had trouble sticking to its promises. That's because it was new to governance, and had to contend with difficult coalition partners. Now it knows how to make the systems work."

Unfortunately for Vajpayee, while business had long been clamouring for these concessions, reaction was lukewarm. The sen-sex rose a mere 105 points, only to fall by 63 points the next day. Explains Jalan: "The devil for buyback at least, is in the details. It will be governed by SEBI guidelines, which are still to be formulated. How stringent will they be, and what will be the delay?"

Clearly, Vajpayee's learning the hard way, reality doesn't matter, perception does.