A coalition government at the Centre is now a certainty. That, says the Indian industry, is the last thing it needs. Says Rahul Bajaj, chairman, Bajaj Auto: "Coalition governments by their very nature are more prone to populist pressure that could come in the way of taking decisions." And quick and hard decisions are the need of the hour. Swimming through one of its worst phases in recent times, industry has clocked a puny growth of 4.7 per cent in April-December, 1997-98. Thats exactly half of what it achieved in the three-quarters of last year, in itself a dismal one. And the worst may be still to come. Adds Ramesh Panicker of Lloyds Finance: "There is a definite lack of confidence in the market, so any government that gives stability will be welcome."
If 1994-95 was the year of enthusiasm and expansion, 1995-96 caution and consolidation, and 1996-97 of crisis of confidence, then 1997-98 would be the year of rude shocks and storms. Few companies have been able to escape the impact of declining asset values, slowing consumption, soaring interest rates, rising inventories, export slump, rickety infrastructure and increased competition. "Virtually the entire industry is on the auction block," say Jayant Dang, managing director, Escorts Finance. And as if this was not enough, the country now faces another cobbled-together government with an inbuilt chaos mechanism.