Narendra Modi takes baby steps

New Delhi: A meeting of investors with policy makers and regulators has revealed that instead of pursuing transformative reforms, the government will focus on execution and getting the implementation right.

Citi organised an investors trip where they met policy makers, banking regulators and rating agencies in Delhi and Mumbai.

“There is policy continuity,” said Citi in a report about its assessment of the new government after these meetings. It said Project Monitoring Group ( PMG), has been expanded and 15 states have also set up portals.  Citi said that Aadhaar is likely to be used for the flagship Jan-dhan program and implementation of GST will be a priority.

“In addition, policy officials indicated the renewed interest on delivering infrastructure (focus on large projects including DMIC, DFC, ease of financing) and cutting red-tape (web-based environment and forest clearance),” said the report.

Citi said that policy makers reiterated the aim to contain Consumer Price Index based inflation. “While supply side measures have been taken to ease food inflation, more needs to be done to increase investments in agri sector and enhance productivity. In the near term, inflation is likely to ease on base effect as vegetable prices correct, but as mentioned in its August policy, the risk to 6 per cent target by January 16 is on upside,” said the report.

On current account deficit (CAD), there was consensus that the it is likely to be contained at below 2.5 percent of GDP on buoyant exports, gold import restrictions and easing oil prices.