The one word cover story of the World’s Most Reputed Magazine set a lot of hue and cry a few days ago! It was the biggest humiliation when the real architect of 91 economic reforms was accused of being Underachiever. All said and done!!! Even the iron industrialist Ratan Tata publically defended Mr. Man mohan Singh and said that PM can’t be singled for the current economic crisis. However this has raised several issues for introspection and planning of economic reforms for the World’s one of the most discussed economy.
On the eve of the official announcement from Mr. Rahul Gandhi about his bigger role in Party and Government, Successful Wining of Pronobda in the Presidential Elections, and completion of one month to the PM’s new Finance Portfolio, it is very much relevant to discuss whether there is any scope for implementation of the new reforms in India. It can be very well said that Economic and Political agenda should go hand in hand to concrete the economic reforms. It’s quite evident that the country is in a Capital crisis and needs rejuvenation in the form of capital. The advocates of reforms are also suggesting that there should be a permission to foreign investors to invest in Insurance Sector to the extent of 49 %. The country needs second generation FDI reforms and there is a need to hike FDI limits also. Implementation of GST, DTC and tax reforms is also the crucial factors across the table. The Government should also clarify the overseas taxation issues. The draft Policy on GAAR needs a finishing from PM himself who is currently looking after Finance Portfolio.
However the sad part of the story still yet to come. There are weak governance issues in the Infra & Telecom Ministry followed by the coal & industrial ministry. Bureaucracy is turning out to be the biggest evil of the Good Governance and decision making has been moved to the one department. The economy is in its Policy Paralysis stage with Lack of Visionary Leadership which is aligning the economy followed by falling GDP rate from 8.4 % in 2010 to 6 % in 2012. In the light of all this, some changes need to be come out and collectively we have to do more. The terms competence and Governance are turning out to be Key words in these days. When we talk out Corporate Governance, what is stopping us from talking about Government Governance? There should be a well competent Government Governance if we really need the catalyst reforms. The people from industry having professional qualification and competence may be bring in to run the Ministries which are currently underperforming. In democracy the change always comes from a strong political will which is lacking today. The economy needs to find the practical, feasible solution to be on track.
The economists expect a good co-ordination between RBI & Ministry of Finance for a common purpose of inclusive growth. On the background of high fiscal deficit, there is a need for Macroeconomic Stability. It’s high time to prioritize the growth at current economic juncture. The economy needs policies and strong institutions with the caliber of RBI. Policy Clarity at the sectoral level is inevitable to suffice the compliance of the Reforms in words, spirit and action. There is a Phobia in Power, coal, Railways & Aviation sector, we need to address the structural issues to get away with it.
The economy feels a need of competent people who can run the economics and politics well. There was a time when the country needed Politicians. There was a time when we needed some of the finest economists . Now the time demands for Eco Politicians who will understand the economics well and run the politics well.
The cosmetic treatment like reducing cost of capital by lowering rate of interests and reducing the tax burdens will not suffice the purpose and a strong medical surgery is needed to override the critical issues of fiscal deficits, setting up fresh projects, money which is not circulating in the economy, the ministerial scams and huge cash surpluses maintained by the Corporates.
The economy needs a viable projects and viable investments. The country needs capital and the capital invested in different projects will really boost up the economy. However the fight is still on with some of the basic issues of economy including the Hunger, Poverty and Illiteracy. After new president Mr. Pronob Mukharjee has rightly pointed out in his maiden presidential speech that there is no biggest humiliation than hunger, the reforms should have a sympathetic concern about these basic issues as well.
The economy needs a visionary leadership and a direction that will boost the economy in large. The economists, industrialists and the whole economy as such is eagerly waiting for sequel of 91 reforms but how long? I think that will be decided by the time!