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Partners Column

“Tough times never last, but tough people do” the title of the book by Robert H. Schuller, is so apt for all those corporates and business houses that have been able to sustain themselves in these very prolonged depressed economic markets. With the government of India, now pushing the pedal on perhaps the biggest economic reform of recent times, the corporates are upbeat and expect a medium-to-long-term positive impact on the macro-economy. In a string of bold initiatives, the government first announced an increase in the regulated diesel prices and a cap on subsided cooking gas usage. It followed up these measures with liberalisation of Indian economy by allowing foreign direct investment in aviation, multi-brand retail, non-news broadcast media and power exchanges and disinvestment of stake in five of the government companies. These measures will now allow the foreign multinationals such as Carrefour / Tesco / Walmart to enter the $450bn local retail market, thereby create millions of jobs opportunities, open new channels for farmers and boost the infrastructure projects across the country. It will also help to tame a stubbornly high inflation and reduce inefficiencies. These measures will also indirectly benefit many other sectors which have been under pressure such as banks, non-banking financial companies, real estate etc. and have also already improved the outlook for the rupee. The importance of allowing 49% FDI by scheduled foreign airlines in domestic carriers and of 74 per cent FDI in the broadcast sector is also to be acknowledged. The demand for civil aviation is on a high rising curve as the per capita income increases day by day. Large capacities have to be created and the operations of the domestic carriers have to come up to match the international standards. It is expected that the foreign airlines will offer some succour to our stranded carriers and bring greater competition and large scale investment.  FDI in the broadcast sector will also change the nature of the game and give a strong boost to digitalisation. All in all the government has finally come out of its shackles and brought in the much required reforms, which has been cheered unanimously by the investors both at home and abroad. I believe that India Inc is now on the road to its economic recovery ……. hopefully
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