Which way is the political wind blowing? BT polled 50 CEOs across Delhi, Mumbai, Chennai, Kolkata, Bangalore, and Hyderabad to get a drift. Sonia Gandhi ranked very low on corporate India's list of desired Prime Minister, but incumbent Vajpayee had a stiff contender in Jaswant Singh (L.K. Advani didn't have many takers). As for the finance minister, Manmohan Singh got overwhelming support, although P. Chidambaram came close. Shockingly enough, only one CEO favoured Yashwant Sinha, although eight were willing to see Arun Shourie become one.

THE GROWTH SCENARIOS

Where does the economy go from here? Theoretically, there are only three options. It can go up, down, or stay where it is. BT explored how the economy will look under each of these alternative scenarios.

BEST-CASE SCENARIO: This assumes a strong, business-oriented government at the centre that is committed to implementing the second-generation reforms. Economy, and not politics, occupies centre-stage.

GDP Growth: The Prime Minister's dream of a 9 per cent growth comes true

Exports Growth: Clipping at 20 per cent, exports fetch a tidy $55.2 billion

Fiscal Deficit: An austere administration lowers it to 3 per cent of GDP

Interest Rate: At 6 per cent, India Inc becomes globally competitive

Revenue Deficit: The promised zero deficit is finally achieved

WORST-CASE SCENARIO: Assumes political chaos. Governance is paralysed, demand flattens, investments have dried up, imports kill local manufacturing, and a global slowdown shuts off India's exports.

GDP Growth: India returns to the 80s Hindu rate of 3 and 4 per cent

Exports Growth: Instead of growing, exports have fallen to $43 billion

Fiscal Deficit: Is running amok at 9 per cent of the GDP

Interest Rate: Has soared to a crippling 14 per cent, bleeding bottomlines

Revenue Deficit: Has widened to 6 per cent, thanks to poor tax collections

STATUS-QUO: Assumes that the economy stumbles along, demand flip-flops, and the government is busy trying to stay in power, rather than make industry-friendly policies.

GDP Growth: Miraculously, economy retains its 5.5 per cent growth rate

Exports Growth: Aided by global recovery, moves at 9 per cent

Fiscal Deficit: Despite rollbacks, the government reins it in at 5.7 per cent of GDP

Interest Rate: Governor Bimal Jalan is happy to let it prevail at 11 per cent.

Revenue Deficit: Widening of the tax net doesn't help and it stays at 3 per cent

WHAT INDIA NEEDS TO DO TO IMPROVE ITS RATINGS

Since 1998, when the BJP came to power, India's credit rating has taken a beating because its fiscal position has been going from bad to worse. After all, as Kristin Lindow, lead analyst (India sovereign rating), Moody's points out: ''Rating agencies look not only at economic progress, but also the fiscal position, since growth does not necessarily mean a happy financial position.'' (Argentina and asean countries are prime examples.) What does India need to do to go up the ratings ladder? Says Shelly Shetty, Director (India Sovereign Ratings), Fitch Ratings: ''India's progress on privatisation, fiscal restraint, and higher export growth coupled with higher foreign direct investment inflows could help improve efficiency and create sustainable growth, thereby supporting creditworthiness of the country.'' But is India up to it? Not really, Shelly believes that the Gujarat fallout already has had a negative impact on the economy. And any failure to progress on economic reforms and bring down the fiscal deficit will hold back economic growth and increase government's indebtedness, potentially leading to a downgrade.

THE WISH-LIST

» Go in for greater privatisation
» Rein in its soaring fiscal deficit by cutting government expenses
» Make foreign investment more attractive
» Push for greater exports
» Expand tax net for greater revenue collection
» Invest in social and infrastructural sectors

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