Even as Prime Minister Narendra Modi’s reform agenda is held up in the parliamentary logjam spearheaded by the opposition Congress, as many as 141 European business groups, enjoying stakes in India, have reported ‘dampening spirits’ over past one year. They also felt that 2016 could be critical for Modi government to unleash reforms, and sustain foreign investment flow.A survey of these companies – conducted by the Swedish Chamber of Commerce in collaboration with the Embassy of Sweden in New Delhi – found that the West was expecting Modi to remove obstacles, mainly in the areas of taxation and labour laws.<!– /11440465/Dna_Article_Middle_300x250_BTF –>”Some obstacles still need to be overcome, mainly in areas of taxation and regulations. So 2016 could prove to be critical in implementation of reforms,” said Kandarp Singh, chairman of the Swedish Chamber of Commerce, releasing the business climate survey (BCS).He, however, added that the overall sentiment remains positive.The government’s biggest tax reform, goods and services tax (GST) legislation, is stuck in the Rajya Sabha, for want of numbers. The government itself, fearing political backlash, had earlier abandoned other reforms like amendments in land acquisition law and labour laws, despite riding to power on a huge majority, 19 months back.Finance Minister Arun Jaitley had cautioned that blocking the legislation would cause immense damage to the reforms push. On Saturday, he said that the changes Congress is demanding on GST bill “go against the grain of what they themselves had brought”.The Swedish Ambassador said that despite a slight dampening of the sentiment, companies from his country continue to invest and expand their manufacturing and operations in India. But he felt that 2016 could be crucial for the Indian government in sustaining this momentum.The survey found high inflation, rising labour cost, delay in receiving payments and long and complex sales procedures as the main dampening factors. As many as 65% of companies described regulations and taxation rate factors hampering operations and ease of doing business in India.Other bottlenecks included import regulations, custom duties, bureaucratic red tape and corruption. Even though there has been relief in bureaucratic procedures and corruption as compared to previous years, one out of three companies reported of having to pay bribes at one stage or other.