The Hindu Business Line : BJP poll triumph seen as booster for reforms

THE unexpected sweep to power by the Bharatiya Janata Party to the three Assemblies of Madhya Pradesh, Chhattisgarh and Rajasthan has provided the much-needed springboard for the Prime Minister and his team at the Centre to expedite decision-making and push through the unfinished reforms agenda in sectors mainly pertaining to infrastructure, disinvestment, agriculture, health and drinking water.

Even as there are differences in the perception as to whether Mr Atal Bihari Vajpayee should advance the Lok Sabha polls to take advantage of the victory wave in the three States, there is absolute unanimity that the overall outcome of the Assembly elections is a healthy development pointing positively towards more reforms. And, this is more so as, perhaps, for the first time in coalition politics, the elections were fought on the plank of development.

According to a top official in a key economic ministry, "This is a victory for Mr Vajpayee. For the first time, no Hindutva or temple cards were played. Steering clear of religion, the Prime Minister won the elections on the plank of development."

What does that mean for the reform process? Explaining, the official said: "This victory will give fresh momentum to economic reforms and policy-making for second generation reforms — be it the sell-offs in PSUs, refurbishing the power sector, further opening up various sectors to foreign direct investment (FDI) or even the rigid labour laws."

Echoing similar views, Mr T.K. Bhaumik, Senior Advisor, Confederation of Indian Industry, said the unexpected wins in the three States "should be taken as an endorsement of the BJP's policies and that should help the reform process. ... Now there is no question of going slow on reforms in view of the Lok Sabha elections. On the contrary, they should be moving forward with a lot more confidence. In particular, reforms in agriculture sector and infrastructure, especially power, would be speeded up and the unfinished task of PSU sell-offs completed."

On labour law reforms, Mr Bhaumik has a word of caution. "Even if they (the Vajpayee Government Ministers) say so, I don't think they will tinker with labour reforms at this stage, not before the general elections. For, apart from educating the labour force and the trade unions, a lot of other policies will have to be in place to cushion the fallout," he said.

Very positive about the poll outcome is Mr Kashi N. Memani, Chairman, Ernst & Young India. "The top leadership in the BJP-led NDA Government at the Centre, that is, Mr Vajpayee and his core team (of key economic Ministers) are very reform-oriented. This thumping victory will certainly energise the top leadership to push through the unfinished agenda of reforms in the infrastructure sector, agriculture, sectoral FDI caps and the introduction of VAT. "Politically, labour reforms will be at the end of the ladder, probably after the Lok Sabha elections," he added.

Voicing similar sentiments from Kuala Lumpur was Dr Amit Mitra, Secretary-General, FICCI, who felt that the BJP victory would further deepen the reform process. When contacted over telephone, he said: "We hope that the new governments will create a five-year plan for the reform agenda in the States for the process of change to deepen further. Besides, the very fact that it is the same party in power at the Centre and the States, the reform process and the effects will percolate down to the States smoothly, without any play of politics."

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