Friday, March 06, 2015

Budget has to deliver on reforms

After an astonishing and uninterrupted run, the Bharatiya Janata Party has begun to feel the heat. The Delhi election has, for the first time in the past eight months, put pressure on the party leadership. Equally, the Government is getting a measure of just how humongous a task they face as they begin to craft what needs to be the defining Union Budget of their tenure. 
If the BJP stumbles in either endeavour, it could mark the beginning of “normal” politics in the country and, perhaps, another period of political wrangling which will prevent the Government from undertaking the deep restructuring and reform of the Governmental system, ranging from modifying labour laws, improving education, easing rules of doing business, transforming the Ministry of Defence, reforming the tax administration of the country and so on. 
The BJP Government headed by Narendra Modi is not weak, but it has a certain fragility based on the fact that power and responsibility rest on the shoulders of one man. So far that man has shown himself to be a superman of sorts, gaining the first ever majority for the party in the Lok Sabha in 30 years, capturing the state assemblies in Congress strongholds of Maharashtra and Haryana, and setting a scorching pace in the country’s foreign relations with major powers like the United States and China. 

But, what the people want of him, and indeed expect, is an economic revolution that will change their lives and those of their children. 
To this end, Modi’s actions, so far, add up to several IOUs, and a number of promises in the form of temporary measures pushed through in the form of ordinances. 
There are, in addition, a number of administrative steps, the so-called low hanging fruit which have been plucked. 
Barracked by the Opposition in the Upper House, the Modi Government has brought in some nine ordinances already. 
These are related to the land acquisition bill, the coal mines bill to enable e-auctions, the insurance bill to increase the cap in the insurance sector to 49 per cent, the quicker arbitration bill to make it mandatory for judges dealing with commercial cases to settle the cases in nine months, the e-rickshaw ordinance to allow e-carts and e-rickshaws to ply on Delhi’s roads, the mines and minerals development regulation to do away with mining leases and increase the lease period from 30 years to 50 years, to merge schemes for PIOs and OCIs and provide lifetime visas for them and finally an ordinance to increase FDI to 100 per cent in pharma and medical equipment sector. 
Many of these are indicative of the direction the Government has set. But, as President Pranab Mukherjee noted in a speech last month, ordinances are not the way to get to the destination. 
There are other areas which are very important, but equally problematic for the new Government such as the Goods & Services Tax (GST) and the labour reforms bill. 
Some BJP states oppose the former or want in a shape which will make it virtually meaningless. 
On the other hand, powerful Sangh Parivar entities, which include the country’s largest trade union, the Bharatiya Mazdoor Sangh oppose any efforts to reform the labour laws which have become an albatross around the country’s neck. 

Delhi may not be a full fledged state, but its election holds considerable significance. The city is, after all, the national capital. 
It is also the home of a significant proportion of well-off people and elites who shape national opinion and policy in a range of issues. 
The BJP’s primary opponent in the election Arvind Kejriwal of Aam Aadmi Party (AAP) has sharply posed the issues and has made it clear that a Government headed by his party would oppose multi-brand FDI in retail, labour reforms and the land acquisition steps outlined by the BJP. 
Were he to win, he could cause considerable dissonance with the Union Government, as well as send the wrong kind of signals to potential investors in the country. 
BJP president Amit Shah (left) has upended the BJP's organisation and brought in a maverick former police officer, Kiran Bedi (right), to counter the appeal of the AAP's Arvind Kejriwal
BJP president Amit Shah (left) has upended the BJP's organisation and brought in a maverick former police officer, Kiran Bedi (right), to counter the appeal of the AAP's Arvind Kejriwal

Of course, victory—or defeat—in the elections will have an intrinsic significance for the BJP as well. 
It has put in an enormous effort to win the poll. It has upended its party organisation and brought in a maverick former police officer, Kiran Bedi, to counter the appeal of Kejriwal. 
The Prime Minister’s principal lieutenant has headed the campaign committee which has seen bigwigs like Arun Jaitley lead the charge, with help from Modi himself.

The Modi Government’s dynamism centred around his ambitious plans to trigger the much-needed manufacturing revolution in India, has led to the temporary eclipse of several important issues that were bothering the country in the past few years. 
Primary among these is that of corruption. In Modi’s scheme of things the issue does not have the kind of salience it gained in the 2010-2014 period. 
But the BJP should not forget that it played a major role in undermining the credibility of the United Progressive Alliance Government. 
Modi believes that his centralised governance and his pre-eminence in the Government makes it immune to charges of corruption. 
As he famously declared “Na khaoonga, na khaaney doonga” (I will neither be corrupt, not permit anyone else to be so). But people in the country are far from being rid of the huge amount of corruption they face in their daily lives. 
The Lokpal envisaged by Kejriwal and Anna Hazare was, of course, over the top and not a viable solution. But people, especially the poor, do want the Government to rid them of the petty and debilitating corruption they face from Government officials at all levels in their everyday lives. 
And no matter what Modi says, that aspect of corruption has not even been dented or seriously challenged by his Government. 
Mail Today February 5, 2015

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