Not all is lost for UPA, yet

The performance of the UPA Government during the last three years was not as impressive as its well-wishers had desired. There was a bit of inaction coupled with a great deal of allegations, a hostile political environment and lack of coherence within the ruling coalition which led to the Prime Minister presenting a lacklustre report card at the end of the period.

However, not everything is lost for the ruling coalition. The two remaining years for the Government could be a period for regaining lost ground. During the last three years, the Government has done the spade work for a great deal of reforms and progressive initiatives that could be taken up during the next two years. These, if earnestly carried out, will transform the reputation of the Government, its Prime Minister and the parties that support it.

Waiting for nod

There is a large chunk of reformist-economic and other legislative business that is waiting to get the nod of Parliament. Bills relating to banking, insurance, pension reform, company law, land acquisition and Lokpal are all waiting in the wings for a take-off. The draft legislation for all these Bills have been prepared and all that remains to be done is to win the parliamentary approval. Needless to say, the Government needs majority support in Parliament if all these bills are to be cleared by the legislature. For this the Government will have to hunt for new allies, while keeping the present allies intact. Two important tax-reform measures are pending and long over due — the Direct Taxes Code (DTC) and the Goods and Services Tax (GST). The spade work for both these initiatives have also been carried out by the Government. What the Government should now strive for is to see that both of them become a reality. The fiscal deficit has assumed alarming proportions. Steps are urgently needed to put a check on the ballooning deficit.

Tactful manoeuvre

To begin with, subsidies on petrol and fertilisers nedd to be cut. Petrol prices, if increased substantially, will also check the growth of petroleum imports, which will not only provide support to the falling rupee but also curb the galloping current account deficit. If the Government is to succeed in curtailing subsidies, it will again require the support of new allies. The white paper on black money that was presented in Parliament provided a framework for introducing measures to tackle the evil of corruption in our society. The paper has identified the sectors that are primarily responsible for the generation of black money such as real estate and gold. So also a notable recommendation is to prescribe limits for holding of wealth in cash — beyond which the wealth could be confiscated. The recommendation of the white paper should be acted upon earnestly.

On the school education front, development initiatives have been well-conceived. The need is to ensure these are properly carried out. As against this, higher and technical education are areas where innovative policies are evolving and wrong initiatives can easily derail the process. For instance, the Government should be careful while taking measures such as replacing the Joint Entrance Examination (JEE) to the IITs with a common entrance exam for all engineering colleges. On the food security front also caution has to be exercised as the fiscal health of the nation is, at present, not conducive to expansion of welfare programmes and perhaps a more opportune moment for launching them would be during the third term of the UPA which can in all probability come its way if the pending legislative, austerity and other measures outlined above are actually taken up for implementation.

(The author is Economic Adviser in the Department of Chemicals and Petrochemicals, New Delhi.)

COMMENT NOW