Mid-term polls will derail economic growth

New Delhi, Aug 26: Jittery over the political crisis, leading CEOs do not want the mid-term elections at a time when the economy has found a growth rhythm.

In a quick survey of 235 CEOs done by industry chamber Assocham Business Barometer (ABB), 91 per cent of the CEOs said that it made no sense to face another elections on an issue of nuclear deal with the US that would be beneficial to the country.

Seventy three per cent of those surveyed said that snap polls would certainly derail the GDP growth rate averaging 8.6 per cent in last three years.

''Political happenings has an important bearing on the health of an economy. The ongoing turmoil would halt the growth momentum,'' Assocham President Venugopal Dhoot said.

The survey was done between August 22-24 this year when the key UPA supporting parties threatened to pull the plug on the Government if it went ahead with negotiating safeguards with IAEA.

Sixty eight per cent of them admitted that they realised implications of the threat to the Government at the fairly later stage dismissing the earlier warnings as mere political posturing.

As the current financial year is embarked with Eleventh Five Year Plan with defined programmes and objectives, sixty seven per cent of the respondents said that any new government would like to 'revisit' the Plan Polices. This might affect the growth of the industry as long-term corporate planning is done keeping in mind the governing policies.

A couple of infrastructure projects have been initiated by the present government including those of Ultra-Mega Power Projects, modernisation of airports, rural electricity initiatives Rajiv Gandhi Vidyutikaran Yojana, Bharat Nirman, Delhi-Mumbai Industrial Corridor Project.

Seventy four per cent of the company heads said that these programmes might get intermitted with the change in Government.

Certain economic reforms like aligning the indirect tax structure of the economy under a single system of Goods and Service Tax (GST) by the financial year 2010 are indispensable to maintain fast and sustained growth of the economy.

Finance Minister had proposed to introduce the new income tax code that will simplify and replace the fifty-year-old law by next year.

As many as 86 per cent of the industrialists feel that in order to successfully bring about these reforms, it is essential for the government to peacefully complete its term.

India has become one of the most attractive destinations around the world. While 'the biggest and the best' multi-nationals are keen to invest in business in India, the possibility of snap polls would shake their confidence in the stability of the economy at policy level and might drive away the potential investors, as large as 89 per cent of the surveyors said.

Industry is also against spending a huge amount of money on conducting elections, which would cost the exchequer more than Rs 2,700 crore. Ninety three per cent of the CEOs are of the opinion that the amount spent on conducting mid-term elections would be a total waste serving no purpose.

UNI