Mid-term elections will derail growth

Jittery over the growing political crisis, leading CEOs have gone on record to place their concern that mid term elections would disrupt the “growth rhythm” achieved by the economy.
In a quick survey of 235 CEOs done by Assocham Business Barometer (ABB), 91% CEOs felt it made no sense to face another election on the nuclear deal issue, which they felt was actually good for the country.
Apprehensions about government stability would affect economic activity at domestic and international level and industry was also against spending huge sums of money on conducting elections, which would cost exchequer more than Rs2700 crore.
The survey was done between 22- 24 August 2007 when key UPA supporting parties threatened to pull the plug on the Government if it went ahead with negotiating safeguards with IAEA.
Findings
* 93% CEOs were of the opinion that the amount spent on conducting mid-term elections would be a total waste, serving little or no purpose.
*73% said snap polls would derail GDP growth rate which averaged 8.6% in last three years.
* 68% admitted that they realized implications of the threat to the Government only at a later stage, for they were dismissing earlier warnings as mere political posturing.
* 67% felt any new government would like to ‘revisit’ Plan Polices which may affect growth of industry.
* Few infrastructure projects have been initiated by present government including ultra-mega power projects, modernization of airports, rural electricity initiatives Rajiv Gandhi Vidyutikaran Yojana, Bharat Nirman and Delhi-Mumbai Industrial Corridor Project: 74% felt these would get derailed with change in Government.
* Economic reforms like aligning indirect tax structure of economy under a single system of Goods and Service Tax (GST) by FY 2010 were indispensable to maintain fast and sustained growth of the economy: 86% felt that to successfully bring about reforms, government must complete its term.
* 70% expressed concern over potential damage to negotiations with international trading partners.