Energised Bureaucracy Ready with Action Plan for Modi
Central ministries dealing with economic affairs are ready with action plans that will help the Narendra Modi Cabinet usher in a new wave of economic reforms in the country, top bureaucrats said.
“We have Cabinet notes ready that could be moved quickly,” a senior official at an infrastructure ministry told ET, adding that other ministries have also drawn up their plans.
Most ministries have drawn up flexible plans that envisage alternative options, so that they can be tweaked quickly to accommodate the new government’s thinking. The proposals range from smoothening financing of growth by providing additional capital raising avenues to public sector banks, an effective plan to tackle food inflation, a blueprint to spur manufacturing, creating new modes of infrastructure, rejig of indirect tax structure and reform of subsidies. Much of this initiative has come from an energised bureaucracy, which is confident that the new government would empower them to take decisions. “We have a blueprint ready on key reform measures that need to be taken immediately…. Inflation is one of the key concerns and in case of failure of monsoon, an urgent contin- gency plan is required,” said a senior official at an economic ministry. Fiscal consolidation is expected to remain high on the agenda, although there is expectation that key subsidy reforms such as in fertiliser will also be in focus. “The emphasis on fiscal consolidation is unlikely to change….Implementation could witness some changes,” said a government official, adding that subsidies could get attention. Officials in the finance ministry have already done the groundwork on the goods and services tax (GST), so that it could be rolled out quickly if the government is able to get states on board.
Experts are already enthused by the new energy in the government. “The decisive mandate in favour of the BJP will, after many years, give us a government which would not be buffeted by the pulls and pushes of a coalition,” said Ketan Dalal, joint tax leader at PwC India. “Of course, it will take time for changes to translate on the ground, but one is hopeful that there will be low hanging fruits, which the government is likely to deal with quickly, so as to send the right signals.”
Hemant Kanoria, managing director and chairman at SREI Infrastructure Finance, said the recent trend of contraction in the manufacturing sector and slowdown in the services sector indi- cates a gradual slowing down of domestic demand. “When supplyside problems get further aggravated by demand-side issues, it is a genuine cause for worry. This needs to be reversed, and very quickly,” he said. The shipping ministry has Cabinet notes ready for a coastal shipping policy aimed at cheaper and faster movement of domestic cargo among nine coastal states, as also a plan to boost inland waterways. The department of industrial policy and promotion has prepared a roadmap for FDI reforms and measures to spur manufacturing. It will also have a note ready for FDI in ecommerce if the BJP shows any keenness on it.