Budget Session Part 2: Crucial Times Ahead

The latter half of the Budget Session which would begin next week (25th April) is expected to be a crucial one, not only in terms of economic reforms but also for PM Modi’s re-election bid in the 2019 Lok Sabha Polls. The senior leadership of the Bhartiya Janata Party, in the cabinet & otherwise, must tone down the nationalism sentiment; keep the Hindutva moron brigade in check and instead focus solely on conducting critical legislation cleared in parliament, thereby kick-starting the economy & providing them with some talking points before the 2017 Uttar Pradesh & Gujarat Elections, the results of which would provide vital indications of the disposition of the electorate before the 2019 polls.

The spirits would be tense in the legislature with the questionable dismissal of the Uttarakhand government by the center, the access to Patankhot given to JIT from Pakistan, the never-ending confusion over the Provident Fund withdrawals, droughts in various parts of the country, amidst the  usual Dalit-Muslim vote-bank securing tactics of the opposition. The Prime Minister must drop his statesman-like silence on issues that dominate the news cycle & lead from the front in countering all possible attacks in parliament. He must not play into the traps set up by the opposition and  instead concentrate on highlighting the many successes of his government so far.

Inflation has been down ever since the NDA government came to power; highway construction is on an all time high of 28 km/day; there is tremendous focus on infrastructure augmentation with the Inland Waterways Bill or the Sagarmala Project; the focal point of Budget 2016 was resurrecting the rural economy & with the weather department predicting a better monsoon this time around, the agriculture sector is expected to turn around with assistance from the new crop insurance scheme, national agriculture market which aims to provide better market access to farmers or the RURBAN scheme which aims to modernize rural areas, thereby increasing economic activity around the area concerned. The Prime Minister’s foreign policy outreach is starting to bear results, the latest being Chabahar Deal which would give India access to Central Asian Markets or the Logistics Agreement signed with the United States, ostensibly to contain Chinese maritime influence in the region. The two biggest successes of the government have been responsive, efficient governance & cutting of red tape. Every minister in the cabinet is being lauded for the initiatives undertaken by their departments, a track record of which has been compiled by Swarajya magazine  (Oil Minister Dharmendra Pradhan is a notable exception in the above compilation).

But the job is far from over. The Banking sector is still in stress, due to inadequate debt recovery mechanisms & exports have been contracting for 18 months in a row, due to weak global demand. The latter can only improve with time but the former can largely be dealt with the Insolvency Code, one of the many important economic reforms currently stuck in parliament.

The Insolvency Code would expedite the process of debt recovery by creating an autonomous body to oversee the same & put a 180 day time limit on the process. The Goods & Services Tax would subsume the many indirect taxes currently imposed & turn India into a single market, a crucial reform to augment GDP growth. The Small Factories Bill would encourage small-medium size business to invest in the manufacturing industry by exempting them from various labour regulations. The Labour Ministry further plans to introduce four integrated labour codes which would replace the colonial era laws that currently operate in the domain. All the above are just few of the many other bills that are currently in the offing & which need to be passed urgently to unshackle the Indian economy.

The Prime Minister must not waste any more time in pushing through the above reforms in the upcoming parliament session, not the least because pushing pro-business reforms right before state assembly elections would be a major political miscalculation. The politics in this country has always been confrontational and would continue to remain so in the future, but its economics must not suffer as a consequence. The Prime Minister understands this all too well & he must play his cards right while dealing with the opposition. ‘Coz come 2019, he would be judged by the very standard he set for himself, SABKA SAATH, SABKA VIKAAS.