UPA's Middle Path To Reforms
What reforms may happen
- More clarity on FDI and FII norms to attract and retain investment
- Stimulus for exporters/SMEs through cheaper credit, more concessions
- Revisit financial sector reforms, slowly push forward the opening up of retail trade
- Boost farm output by focusing on institutional credit and rural infrastructure
- Greater devolution of funds and power to districts for implementing central projects
- Extension of NREGA for developing infrastructure, providing more jobs
- Larger private sector role in primary/secondary education
- Better pay and infrastructure for doctors and staff in rural areas
And what may not
- Privatisation of PSUs; stake sale through initial public offerings most likely route
- Greater accountability of states and ministries for poor fundutilisation and outcomes
- Labour reforms to ensure better social security benefits for lower-rung workers
- Comprehensive resettlement-rehab policy for people displaced by big projects
- Making it mandatory for firms to invest in skill development, waste management
- Annual review of educational institutions, particularlytechnical colleges
- Power and drinking water supply to all households by 2012
- Remove subsidy on cooking fuels, completely link it to market prices
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The Spoilers
- Large government borrowing and fiscal deficit will limit capacity to push ahead with state-funded projects
- Traditional divide within Congress on reforms, and the way ahead to put the economy back on the path of high growth
- While the Left is out of the picture, TMC's Mamata Banerjee could prove to be a stumbling block to reforms
- Old arrogance of Congress could prevent consensus in crucial areas, like subsidy to the poor or spectrum allocation
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Mega Investments On Hold
- ArcelorMittal, Jindal Steel and Power and Sterlite Iron and Steel projects in Orissa and Jharkhand are yet to take off
- Ultra-Mega Power projects in Chhattisgarh, Maharashtra, Tamil Nadu and Karnataka. Each would require an investment of Rs 16,000-20,000 crore.
- POSCO’s $12-billion steel project in Orissa has been stalled since June 2005
- Tata Steel’s proposed project in Bastar in Chhattisgarh hit by farmers protests
- NHPC’s Rs 2,300 crore Koel-Karo Hydel Power Project in Jharkhand is likely to be abandoned
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Outlook
By Lola Nayar with Pragya Singh, Arti Sharma and Arindam Mukherjee
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