Macquarie has awarded the UPA government 8.5 out of 10 for celebrating 100 days in power

Dated 26th August, 2014

As the Narendra Modi-led NDA government nears completion of its 100 days in power, experts are putting together report cards analyzing the government's performance over the past 3 months or so Though skeptics, including erstwhile UPA partners, are dismissing everything that has happened over the past 3 months as ‘no better than the previous government’ due to lack of ‘tangible’ outcomes on the economic front, there are some who believe that decision making has improved immensely and issues are being tackled head on.

Also Read: 100-day delivery: Modi ready with infra report card Macquarie Research in its latest report has given the Modi government 8.5 out of 10. The performance metric is based on economics, foreign policy, governance and state relations / Parliament productivity/ politics.

With an improving economic growth and ‘ease of doing business’ being the key focus, the government has managed to score 8 out of 10 in this category.

“Special emphasis on infrastructure projects was visible in the Budget,” said the Macquarie report. Easing of funding norms, liberalised FDI and ‘Make in India’ (in manufacturing) pitch, have gone in favour of the government.

Even the reforms being pushed by the BJP government in Rajasthan on labour, land and subsidies do make for a strong start, said the report.

However, what fell short of expectations was the delay in gas price hike, no commitment on timeline for GST and half measures on FDI in Defence, it added.

On foreign policy front, the government has scored 10 out of 10. “Calling SAARC leaders for the swearing-in ceremony was a masterstroke, and it was followed by a visit to Nepal, Bhutan and Myanmar to underscore the good relationship with neighbouring countries,” Macquarie report said.

The government also fought hard at the WTO summit against Trade Facilitation Agreement (TFA) to protect farmers and India’s food security and even played a strong role in creation of the new BRICS Bank, it added.

On governance, Macquarie has awarded the government 8 out of 10. According to the report, the government made a good start by downsizing the Cabinet. “Modi cut down on the number of posts and departments and inducted young ministers into important ministries. He also laid out a 10-point agenda for ministers to build confidence in bureaucracy, bring transparency into government and ensure stability in government policies while promoting growth,” the report said.

The government also launched a website to encourage citizens' participation in the governance process. The NDA has scored 8 out of 10 in the Parliament productivity/ politics/ state relations. According to the note, the government’s recently-concluded Parliament session could be considered fairly productive with least amount of hours lost due to disruption compared to UPA government’s record. However, non-passage of the Insurance Bill, which sought to raise the FDI limit to 49 percent, in the Rajya Sabha -- where the BJP does not enjoy a majority -- disappointed markets. It also raised doubts around how the government would manage passage of other bills through a hostile Upper House for the next couple of years, the report added.

However, Macquarie thinks the market is ready for a new high. With the results season out of the way, focus will be back on economic data which continues to improve. The correction in crude oil price by around 11 percent from the recent peak has opened up the opportunity to stop diesel price hikes as losses of oil companies narrow, and also abated worries in other areas such as current account deficit, inflation etc, the report said, adding “the tide is turning, remain invested.”