NOT ALL BIG BANG REFORMS, BUT SOME ARE BANG ON TARGET
N ext week, as the run-up to the first anniversary of Prime Minister Narendra Modi’s government begins and the ubiquitous report cards start making their appearance, one yardstick by which his government’s performance will be measured will be what it has delivered against what it had promised. High up on the list of those promises was economic reforms, development and progress. Critics of Modi’s government, including the freshly-minted ones such as Big Business, have already begun carping about how ‘big bang reforms’ haven’t been announced by his government — neither in its first full-year budget nor otherwise. You can safely bet that every report card on the government’s first-year performance will also feature that grouse.
But what exactly are these ‘big bang reforms’ that business and industry talks about? One of them clearly is the goods and services tax (GST) Bill, which would dismantle the tax barriers between states and unify India into a single market — making it easier for businesses to trade and expand. Another is the land Bill, which would make it easier to not only acquire land to build infrastructure and factories but also help create jobs for people, who have to otherwise live wretchedly off agriculture, which supports nearly half of India’s population but contributes to only 14% of its GDP. A third is the real estate Bill, which could, at least partly, clean up the rather murky nature of real estate transactions by registering and regulating deals and preventing builders from diverting money collected from their customers. And, a fourth is the black money Bill, which is aimed at combating the menace of Indians stashing undeclared cash and assets abroad to avoid paying taxes. And what’s the common strand that runs through all of these? The Opposition is trying to either thwart, or delay, or just derail all of them in Parliament.
The funny thing is that in private, prominent leaders of nearly every party outside of the NDA (even the Congress) will tell you in a heartbeat how they agree in principle with almost every Bill that the Modi government is having trouble in getting enacted in Parliament, including the hotly disputed one for land acquisition. But in public, most of them — the Congress, of course, but the others as well — are hell-bent on making the most of the skewed numbers in Parliament, where the NDA is a brute majority in the Lok Sabha but a poor minority in the Rajya Sabha, to try and stymie those very pieces of proposed legislation.
Such filibustering is not uncommon in parliamentary politics but the BJP-led NDA only has to look at its own conduct during the UPA regime when it was in the Opposition to see that often what goes around will come around. In 2011, the entire winter session of the Lok Sabha was rendered dysfunctional because it protested the UPA government’s decision to allow FDI in multi-brand retail; in 2012, the monsoon session was washed out because it relentlessly demanded the then PM’s resignation; and, through the UPA’s two terms, the same Opposition blocked the passage of the insurance Bill, which had been pending in the Rajya Sabha since 2008. But irony is also not uncommon in politics and in the end it was the NDA that got the insurance Bill, an important reform, enacted in this year’s budget session.
In the din over the absence of ‘big bang reforms’, it’s easy to overlook the other reforms that the Modi government has pushed through. Diesel prices have been de-regulated, something that successive governments have been scared to do for nearly 25 years; and the allocation of natural resources such as coal have been made rule-based rather than discretionary, making the system transparent and fair.
Sometimes when the field gets levelled, those not used to it can have trouble playing. Big Business’s lament about the government may have more to do with levels of discomfort than with real concerns about reforms. Last month, Modi told this paper: “My government will make policies; if you fit into it, come on board, or stay where you are. My job is not to spoon-feed anyone.” For Big Business, that may be a cue to wean off faster than it has in the past.