One is fed up with this kind of continuous eco(non)-sense dished in media. Just a month ago, as media celebrated one year of Indian government, they went over the top saying how much the govt has done. And now within a month they say we are disappointed with the pace of reforms.
A poll conducted by global ratings agency Moody’s has shown that there is some disappointment with the pace of economic reforms being pursued by the Narendra Modi administration and there was increasing concern about the risk of policy stagnation. “Specifically, almost half of the poll respondents identified sluggish reform momentum as the greatest risk to India’s macroeconomic story,” Moody’s Investor Service said.
Several key legislative reforms are pending in Parliament and investors have complained about the slow pace of reforms. The government has taken several measures to boost growth and revive sentiment but has shied away from taking big-bang measures.
“Moody’s notes that multi-party, federal democracy in India underpins a gradual pace of policy implementation. While many of the policies are positive for India’s institutional strength, the direct impact of growth-enhancing reforms is only likely to take full effect over a multi-year horizon,” the agency said.
“For example, plans to cut the country’s corporate tax rate to 25% from the existing 30% over the next four years will be credit positive for all Indian companies as it will reduce their tax expenses and increase competitiveness over the medium term,” it said.
Why aren’t there enough polls on performance of such agencies themselves? Much of the crisis since 2007 is because of superlative ratings given by the same agencies.
I think there is one easy way for govt to get rid of all such yo-yo praises and criticisms. It should just outsource its economic policy to all such well-wishing yet disappointed agencies. And yes, they should first define what is a big bang reform.