30 November, 2020

The Amber Light Is On

A 'caution or bust' mood grips industry, and no one's crossing the line till the polls are over

The Amber Light Is On
outlookindia.com
-0001-11-30T00:00:00+05:53

THE irony is obvious. While economic dynamism lies at the very core of all the sound and fury of the 11th Lok Sabha elections, events in the countdown period have put the brakes on all future plans in a wide range of industries. And the fact that April-May is considered a lean season for economic activity has added to the litany of woes.

Says G.C. Garg, managing director of Lloyds Finance: "The monetary policy of the country has been overwhelmingly influenced by elections." Thus, one of the first casualties was liquidity which, in turn, has had a haemorrhaging effect on a number of businesses. The Rao Administration decided early on that it would go to the people with a low inflation rate. Says the CEO of a finance company: "I know for a fact that the Finance Ministry had given strict instructions to the Reserve Bank of India (RBI) to control inflation by whatever means. And the RBI assiduously followed by cutting down the money supply. I shudder to think of the consequences." 

The other major casualty has been public issues. "A lot...

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