The new government can hit the ground running, now that it has finished with the business of allocating portfolios to the 72 new ministers. To begin with, there is the Budget around the corner, the contours of which were laid out in the vote on account in February. Besides the Budget, there are a host of issues to be addressed, such as rationalisation of GST and income tax rates, creation of jobs and reforms in farming.

But even as the government starts carving out its priorities, it must dispel a looming concern over whether coalition dynamics will disrupt decision-making and the pursuit of reforms. It is crucial to bolster confidence at a time when private investment as well as consumption demand have started to pick up. An agreement between coalition partners on the economic pathway can pave the way for smooth decision-making, as differences can be sorted out beforehand. For starters, this exercise will help in framing a Budget that does not stray from the current fiscal consolidation path or the focus on capital expenditure. Budgetary outlays on capital expenditure have risen from 1.5 cent of GDP in FY18 to 3.5 per cent projected for this fiscal in February; capex accounts for about a quarter of the size of the central budget of close to ₹48-lakh crore. As for welfare, a shift away from sheer dole to creating health and education infrastructure must be pressed upon.

From these elections, it is even possible to infer that the wholesale ‘guarantee’ of freebies has not really translated into electoral gains for anyone. Skilling, and improving the employability of the youth and their productivity deserves attention. Reducing the cost of health through public healthcare and insurance coverage is called for. Farm reforms, particularly in the storage and marketing of produce, must be pursued not only to boost rural incomes, of which there have been signs of distress over the last year, but also to improve supply chain efficiencies and control stubborn food inflation. It is possible to hammer out a Budget that is investor-friendly and welfarist, without being populist. Besides the structure of the Budget, details such as concerns over personal income tax rates and slabs should be attended to.

As for GST rates, these can be rationalised by merging the 12 per cent and 18 per cent slab into a 15 per cent category and the 5 per cent and 12 per cent slab into an 8 per cent category. In the renewed pursuit of free trade pacts — negotiations with the UK and EU are at an advanced stage — it should be borne in mind whether these are in tune with the performance linked incentive schemes. Robust data is key to making the right economic decisions. The Census exercise must be taken up urgently, while the base years for price and growth data too need to be updated. The collective resources of a coalition government can, in fact, result in unanticipated benefits — including a consensus over reforms across sectors and institutions.