Poll’s Toll And The Chance

So the dates for the 14th General Elections in India, third in three years, are finally
out. End September and early October. Which means a few things. Firstly, economic activity
will slacken. Everybody who has an excuse and his grandmother will now plead ‘economic
uncertainty’ for even the most mundane business activity. And every commercial enterprise
will start downsizing, soft-pedaling and slowing down its plans for the fiscal year.
Secondly, investors, importantly, foreign institutional investors, will start recasting
their plans for the next five months. This could mean holding back on investments, cashing
out on some big opportunities and general lethargy as far as new projects are concerned.
This would mean that the money market may just tighten and interest rates may get affected
and move northward. Thirdly, the government departments will go slow or simply stop
buying. The alibi being that ‘you never know what the new government will want.’
Bureaucrats will go into collective hibernation, plans announced will be put on the
backburners and everybody will hold their breaths for the result of the election and the
14th Lok Sabha to be constituted.

Well, don’t. In the current political scenario, nothing much might really change. For
instance, will any one party get absolute majority? Unlikely. Will the regional parties
lose their importance? Again, unlikely. Will it be a coalition again? Most likely. Will
the new government be again subject to political compulsions like the earlier one?
Possibly. If all these things are going to remain the way they are, then what is corporate
and economic India waiting for?

Really nothing. In fact this could be a good time, with the budget passed, to go for that
dreamy state-where the economic activity goes on irrespective of the political acts of
commission and omission. For one, bureaucrats need to rid of the ‘new political masters’
syndrome and get cracking. Sure, some things may not be possible, like statutes etc. What
is possible are the things envisaged in the budget and for which allocations have been

The Finance Bill is passed and the Credit Policy is also out. It could be a good time for
the industry bodies to press for the Summer Season Policy to be implemented in toto, as
per the directives of the RBI and the erstwhile Commerce Ministry. Let the industry go on
the overdrive and capitalize on the political vacuum rather than feel paralyzed due to it.

Just to leave behind a comforting thought-it has been done before.

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