The Hindu Business Line : A loud signal for early polls

With the Union Finance Ministry unveiling a "historic mini-Budget" of sorts - coming as it did like a bolt from the blue on a bright Thursday afternoon - the Centre's formal announcement on going in for early elections, following a final decision at the Bharatiya Janata Party's `Chintan Baithak' in Hyderabad later this week, now stands reduced to a mere formality.

Significantly, the coalition partners in the National Democratic Alliance (NDA) who met here this evening to discuss the pros and cons of holding early polls have authorised the Prime Minister to take a final decision on the issue.

Holding early elections may be viewed as political expediency in certain quarters. But that apart, a comforting factor is that early elections will also result in taking a "bold" step forward in the reform process, without having to take two steps back.

Ever since the BJP romped home in the three State Assembly elections, jubilant party functionaries had engaged themselves in a debate over the tactical timing of the general elections.

The moot point was whether the Lok Sabha polls, which are due in October 2004, be advanced to some time in March/April to cash in on the `feel-good' upsurge.

As was clear from the mood within the party, the majority appeared to be in favour of early polls.

And this, even as the Prime Minister, Mr Atal Bihari Vajpayee, as well as the Finance Minister, Mr Jaswant Singh, went on record, soon after the assembly poll results, stating that the general elections would be held in normal course as scheduled, and that the Government would go in for a full-fledged Budget for the new fiscal.

Perhaps, the two top party leaders had spoken their mind too early, only to scotch rumours at that point of time - pending a final decision - so as not to send any wrong signals that may have a negative bearing on the economy.

Now, the Government has come out with exhilarating announcements this week on two consecutive days - the first on margin trading yesterday to further boost the stock markets, which it did on Thursday, followed by the mini-Budget package today, which stopping short of unveiling the fiscal deficit target for the new fiscal, has enough powder to further kindle the feel-good factor among the various industry sectors and the urban middle-class at large.

One cannot be so naïve as not to predict the intention of the ruling party and its coalition partners as far as the polls are concerned.

Be that as it may, there's no gainsaying that any political party, placed in a similar "seemingly advantageous" situation, would have cashed in on the overall buoyant upsurge.

For one, with the country blessed with the best monsoon rainfall in a decade in 2003, leading to a spurt in GDP growth, can a political party depend on the vagaries of the weather this year too, and gamble away its poll fortunes? The answer is a definite "no."

But that apart, even the ongoing process of `second generation' reforms stands to benefit from early polls.

Going to the people for a mandate in October as scheduled would have meant a "populist" Budget in February to woo the people.

In effect, apart from handing down a number of sops and goodies to the people and industry at large, the Government would have fought shy in going in for the long-pending labour reforms, ending the subsidy regime as also in implementing the Fiscal Responsibility Act measures.

The delay in implementation would have meant a setback to the reform process.

Now, it will be left to the new regime at the Centre to take up the process of reforms in continuity.