The foreign rating agencies are at it again, downgrading India’s GDP growth forecast to 5.5 per cent for 2012-13 and threatening to downgrade India’s sovereign rating because they see no progress on the policy decisions front or the reforms front. They have not been impressed by the Prime Minister’s “animal spirit” speech following Pranab Mukherjee’s departure from the finance ministry.
To see this as a wake-up call would be displaying misplaced optimism as there have been several such wake-up calls and alarm bells to no effect. Even the legendary Kumbhakaran would have woken up. Prime Minister Manmohan Singh has in his Independence Day speech dismissed the Cassandras and said that India’s GDP would grow “a little better than 6.5 per cent”. But he didn’t say how this would happen; he only complained that lack of political consensus on many issues was hampering the creation of a favourable investment climate.
So, would he be going on a public relations spree to get this political consensus that he says would get the GDP to keep its tryst with over 6.5 per cent growth? Will PR be the name of the game? It would certainly help, for instance, in getting the goods and services tax bill passed (India Inc. says this alone would boost GDP by two per cent); or in getting the squabbling ministries of power, environment, coal and mines to come to a consensus so that all power, steel and fertiliser projects, held up for want of permission, can move forward.