UPA govt gets 7/10 from Indian corporates: Assocham

The partial withdrawal of stimulus and low agriculture growth also drew flak from a majority of the 500 Chief Executive Officers (CEOs) surveyed by industry chamber Assocham.

"As such, majority of them felt that the UPA's performance could have been still better and may have scored more than seven points," the survey said.The Congress-led government would complete its first year of the second term on May 22.

The government received rave reviews from corporates on its policies to reform education, modify FDI rules, simplify procedures and market regulator Securities and Exchange Board of India's (SEBI) initiatives to improve the capital markets.On the education front, the respondents said the government's initiative has been praiseworthy both at the primary level and beyond.

They also said the steps taken by the capital market regulator to protect investors' interest have been extremely praiseworthy."This includes reduction in the listing period in case of IPOs and FPOs, removal of entry load in case of mutual funds and introduction of currency futures in yen and pound," the CEOs said.

From this month, SEBI has reduced the time between IPO close and listing of equity shares to 12 days from the earlier 22 days.Respondents also praised the government for making FDI rules more investor-friendly and simplifying the procedures.

The government has allowed the Foreign Investment Promotion Board to consider projects involving FDI of Rs 1,200 crore against the earlier limit of Rs 600 crore.
The government has also placed all FDI rules in one document, aiming to making the policy more comprehensible to foreigners.

Even as corporates raised concerns over high fiscal deficit that may not be contained at the targeted level of 5.5 per cent this fiscal, the majority of them were unhappy over the government's move to partially withdraw the stimulus.

The government raised excise duty by two per cent to 10 per cent on non-petroleum goods to contain fiscal deficit that is estimated to have touched 6.7 per cent of GDP during 2009-10. The majority of corporates were of the view that the government's move affected their margins, Assocham said.

"Over 300 respondents still believe that stimulus package should have continued for this fiscal, especially for medium, micro and small enterprises," the chamber said.
Further, the corporates said inflation and less than anticipated progress in roads and highways are concerns which need to be tackled.

The majority of them said high inflation is a concern and may continue for a couple more months, as it remained largely driven by external causes such as higher commodity prices, including crude.

Inflation remained high even as it moderated to 9.59 per cent in April from 9.9 per cent in March.However, revised figures showed that inflation touched double digits and stood at 10.06 per cent in February.

Over 300 CEOs also complimented the RBI for its prudent monetary management.
From January this year, the RBI started tightening money supply as inflation became the primary concern.

"Despite this, interest rates remained more or less stable. Over 300 CEOs felt that it is due to prudent monetary policies followed by the apex bank," the chamber said.
However, conditions of roads and highways did not improve much in the last one year as National Highways Authority of India could not mobilise timely funds, resulting in delays in projects, it said.

The other area of concern highlighted by corporates was the lack of reforms in the farm sector that retarded its growth."It is unlikely that agriculture growth would be taken to 4.7 per cent by the terminal year of the 11th Five-Year Plan (2011-12) as projected, even if India has good monsoon," the chamber said.