- POSTED: 21 May 2014 17:30
- UPDATED: 21 May 2014 19:49
India's Bhartiya Janata Party's spectacular victory in the general elections has fuelled expectations that the party will promptly start delivering its economic promises.
MUMBAI: After a spectacular victory in the general elections, India's Bhartiya Janata Party (BJP) will soon take charge of the country.
Coming back to power after a decade, and with a striking majority, the party has to do a lot to prove itself.
It is the biggest election victory of any party in India since 1984. Winning almost 283 seats, more than the required 272 to form a government, the BJP has the privilege to dominate Parliamentary proceedings.
That means it can pass and implement laws without any hurdles, and that has fuelled expectations the BJP will promptly start delivering what it promised.
Sidharth Birla, president of Federation of Indian Chambers of Commerce and Industry, said: "Inflation is one of the key issues that need to be addressed -- from the last common denominator of the society right up to the top. And the key part which affected people all over the country is food inflation.
“We believe that the leadership must outline a national agenda for job creation because we keep talking employment, but job creation ultimately is one encouraging consumer behaviour, and number two -- encouraging a small person to come and do business."
Doing business in India is deemed to be very painful, mostly to do with a lack of infrastructure and too much red tape.
Adi Godrej, Godrej Group’s chairman, said: "I think one of the very important tasks of the new government will be to improve the ease of doing business; quicker decisions, better decisions, etc. Second, our industrial production has actually been declining compared to the previous year.”
But in a bid to boost foreign business, India must first figure out its tax policy. Ambiguities in the tax code has led to hefty penalties for the likes of Vodafone, and that is discouraging foreign investment.
Sanjeev Aga, corporate sector expert and Idea cellular’s former CEO, said: "The first thing will be to put at rest any concerns on retrospective taxation and whether or not they are able to immediately kill old cases, there will certainly be an announcement that this will not be used again. I think that it will solve half the problem but even the old cases have to be quickly settled, you can't let them go on for years and years into arbitration. It's not fair.”
One of the major reasons the BJP emerged victorious was its pledge to end corruption. It was an easy sell after the Congress party was mired in scandals in the telecom, coal and mining sector.
Analysts said India needs to keep a transparent administration if it aims to bring in foreign investment, and if it keeps its nose clean, it will cash in.