New Delhi, Aug. 25: Industry choked on its optimism and shook with indignation over the manner in which a few terrorists could knock the stuffing out of something as fragile as the country’s business confidence — which has been riding a six-year high.
“We are sick and tired of such blasts,” said Rahul Bajaj, chairman and managing director of Bajaj Auto. “The government should see if there is a Pakistani hand behind the killing of so many innocent lives. Two things will happen now: India will not see foreign tourist arrivals for the next two months at least. And the capital markets will hit another low.”
Chuffed about prospects for the year after a strong monsoon, industry has been hoping to snap the streak of anaemic, recession-wracked results of the past few years.
Just two weeks ago, the CII said in its state of the economy report for the quarter ended June 2003 that it was revising GDP growth forecast to 6.5-6.8 per cent from an earlier forecast of 6.4 per cent in 2003-04. Last year, GDP growth had stuttered to 4.4 per cent.
The Ficci Business Confidence Index for the first quarter of 2003-04 had also showed a rise of 12.6 percentage points at 71.3 from an earlier 63.3. The ET-NCAER business confidence index stood at 125.7 in July, a surge of 13.8 per cent from 111.9 in the previous round.
Monday’s blasts that rocked the country’s commercial capital forced business barons to mull gloomily over the eddying ripples and how they would impact Indian business.
“Investors will be all the more scared to come to the financial capital as it has earned the dubious distinction of being a very unsafe place to do business in,” said Swati Piramel, chief scientific officer of Mumbai-based Nicholas Piramal India.
However, others reckoned that industry was resilient enough to face the crisis. Said CII president Anand Mahindra: “Despite the disruptive nature of these blasts, it will be business as usual in Mumbai and rest of the country. The people and the economy are quite strong to withstand such attacks.”
Echoed Onkar S. Kanwar, chairman and managing director of Apollo Tyres: “The blast is shocking and will affect business. But I am sure it will pick up in the next 8-10 days and industry will be back in action.”
Tisco managing director B. Muthuraman said, “Just when things begin to look up, some such incident shakes investor confidence. I just hope that it will be shortlived and not as severe as the 1993 blasts which cast a dark spell over industry.”
Rajiv Gulati, managing director of Eli Lilly, said, “Business confidence gets badly shaken by such acts of terrorism.”
He said that though the supply chain of drugs, especially life saving drugs, are not likely to be affected by such incidents, “Such acts are detrimental for the business environment and bad for the economy.”
Kiran Mazumdar Shaw, chairman of Biocon India, said, “I think the blast is damaging to India’s international portfolio. Financial markets have been affected very badly and all foreign investors will feel nervous. I am confident that the government will take very strong measures to tackle the situation.”
RPG Enterprises chairman Harsh Goenka said, “These bomb blasts are an act of terror. However, they will not affect the spirit of Indian business. The fall in the sensex is more of a reaction, which will recover as industry gathers strength after the impact of the blasts wears away.