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Indian business leaders hope Narendra Modi can deliver post-election changes

Apr 17th, 2014
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Business leader are calling on India's next government to make policy consistency, job creation and strong leadership its top priorities in order to boost the economy and restore investor confidence.

The current Congress Party-led government, the United Progressive Alliance (UPA), has presided over a time of mixed economic performance in India.

India is currently voting for a new government and recent polls point to a big win for the main opposition party, the BJP.

"The first thing I would want the new government to do is not to do what the previous government did," said Sunil Seth, a senior partner of Seth Dua Lawyers representing foreign companies trying to do business in India.

During UPA's ten years in office more than 100 million people were pulled out of poverty and the country enjoyed a brief period of record growth.

But in recent years economic growth has slipped back to less than 5 per cent, young graduates are struggling to find jobs and the government has been beset by corruption scandals thought to have cost Indian taxpayers tens of billions of dollars.

Investor confidence has slumped and many foreign companies have put off investing in one of the world's largest markets, causing angst for local businesses.

India Votes 2014: Election coverage

ABC News has comprehensive coverage of the 2014 Indian general elections from our correspondents in the region.

Business leaders say one of the UPA government's biggest mistakes was retrospectively amending the tax law, hitting telecommunications giant Vodafone with a multi-billion dollar tax bill.

"Whatever policies that the government decides on it should not back track on that," Mr Seth said.

"You can't have foreign investment coming on the basis of certain policies and assurances and then six months or a year later that is completely turned around."

Uday Challu, the CEO of IT support firm iYogi based at a technology hub called 'Cyber City' on the outskirts of the Indian capital, says his business has expanded in spite of government policy.

His company employs thousands of young, skilled or semi-skilled Indians entering the job market each year.

"If these kids would have been educated better - in what I would call a more efficient fashion - they would come into our system and be able to be skilled faster, I would not have to spend time in training them," he said.


"What we need is a change in leadership."

Narendra Modi the frontrunner

The face of change in India is the BJP's prime ministerial nominee, Narendra Modi.

He is a self-made man - starting life as a tea vendor, and working his way up through the Hindu nationalist party, the RSS, to become the Chief Minister of the economically prosperous state of Gujurat and now the BJP's prime ministerial nominee.

Mr Modi's Hindu nationalist roots and role as chief minister when religious riots in Gujurat left 1,000 people - mostly Muslims - dead make him a controversial figure.

But his economic credentials are appealing for many; he promises to revive the national economy by replicating his 'Gujurat Model' on a national scale, which focuses on increasing development and reducing red tape.

"For a capital seeking a home or a place to invest and get returns, the fact that you don't have bureaucratic delays, the fact that you don't have lack of policy coherence, and all that, it is a huge plus when it comes to that part of a Gujarat model," said Gautam Thapar, the chairman of the four billion dollar Indian business conglomerate, Avantha.

"There has to be a revival in the capital market so the first thing that they need to figure is what changes do they need to bring about confidence in policy making."

With a mix of federal and state control on many aspects of doing business in India, Mr Modi's 'Gujurat Model' might not be the answer for every part of the country.

The leader may also struggle to implement his policies if his party doesn't win with a clear majority, but for some industry leaders at this point anything is worth a try.

"I think we should give him a chance, I think he deserves a chance," Mr Seth said.

Uday Challu agrees.

"I'm pretty certain that he can't do worse than what has happened in the last five years," he said.

"You just need a leadership change. You need a new guy at the top and hopefully he is the right guy."

ViaAustralia News Network

Stephanie March