Samir Arora Defends NAMO In “Inaction” Charge

NAMO has been facing relentless criticism from informed circles. First, Jim Rogers, the maverick legendary investor, launched a blistering no-holds barred attack in which he accused NAMO of “only talk and no action”. “I don’t know how much longer I and other global investors will hold on to the Indian markets” he warned NAMO. This was followed in quick succession by Deepak Parekh, the “guiding voice” of Indian Industry. Parekh also tore into NAMO on the basis that “nothing has changed at the ground level” and that “impatience is creeping in”.

However, Samir Arora, who has a reputation for plain speaking, has rushed to NAMO’s rescue. In an interview to CNBC Awaaz, Samir pointed out that criticism against NAMO for alleged inaction is unjustified. He explained that NAMO is putting things in place and that changes at the macro level do not become easily visible and take time to register themselves in day-to-day life.

Samir drew a parallel from big-ticket corporate restructuring to drive home his point. He pointed out that though top-level management changes have happened in companies like United Spirits/ Diageo, Infosys and the Tata Group, the changes are not yet visible at the micro level in the form of a dramatic increase in sales, EPS etc or the other factors used to measure a company’s performance. However, over time, these changes would manifest themselves in a subtle manner. We need to be patient he added.

Samir also emphasized that even on merits the criticism is unjustified. He pointed out that in the short time that has elapsed, NAMO has demonstrated effective leadership and a clear-cut pro-Industry and pro-economy stance. He also explained that a number of things are going right for the Country and that all the elements are in place such as fiscal deficit is down, current account deficit is down, inflation is down, foreign flows are up, foreign sentiment towards India is positive etc. He reminded the audience that Morgan Stanley has predicted that there would be a 24% increase in corporate earnings. These are the “changes” for which we have to give NAMO credit, he hinted.

Samir also took on NAMO’s detractors head on for whining about not being able to “see any change”. “They are unable to see anything, whether good or bad. In 2007, they couldn’t see anything bad and now they cannot see anything good”. “Rone wale ko to rone padega” Samir added, in a contemptuous tone.

“We should look at the big picture and not whine about not being able to see the small changes on the ground” he said emphatically.

At the end, Samir made the reassuring comment that the expectations of foreign investors from the Budget is not high and that in the event of a disappointment, the markets are unlikely to crash dramatically.

Now we have to wait and watch whether the vituperative criticism of “inaction” and the AAP humiliation will compel/ induce NAMO to unleash big-bang reforms in the Budget which will send the markets flying into orbit. Fasten your seat belt!