Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,691.45-0.05
Stock Analysis, IPO, Mutual Funds, Bonds & More

Blueprint 2.0: Here's what the new government's first big decisions are likely to be

ET Magazine spoke to key officials to understand what’s in store in the new govt’s 100-day action plan.

, ET Bureau|
Updated: May 26, 2019, 11.42 AM IST
0Comments
BCCL
1
This time, Modi may roll out big-ticket schemes from day one, with the first priority being job creation.
It was 2 PM on Thursday. Early trends of Lok Sabha election results indicated a landslide for the ruling Bharatiya Janata Party and its allies. The counting of 600 million votes cast during a seven-phase poll that began on April 11 was still on. The return of Narendra Modi as the Prime Minister of India looked certain.

Now there was no time to be lost. A frenetic pace of activity began in Delhi’s establishment corridors. Security agencies directed beat traffic constables to clear parked vehicles along the Raisina road and beyond, as they prepared for the PM convoy’s movement to the BJP headquarters that evening. And on the newly refurbished fifth floor of the government think tank NITI Aayog, where the office of its chief executive officer Amitabh Kant is located, an urgent meeting was convened, believed to be at the direction of the Prime Minister’s Office (PMO), to prepare a road map for the new government.

“The ministries have already worked on 100-day action plans; NITI Aayog has worked on it. But it’s for the Prime Minster to take the final call. The 100-day plan is about pushing difficult and big-ticket reforms,” Kant told ET Magazine in an interview that evening.

2

So, the reforms of Modi Sarkar-II could well include key structural changes in job-creating sectors such as construction, tourism and textiles, and finding suitable modalities to speed up credit flow and private investments. The buzzwords in the coming days could be agri-business, ease of living, aspirational districts and $5 trillion economy (India is currently a $2.96 trillion economy). There may also be radical policy decisions to allow private players in the business of space.


ET Magazine spoke to key officials at three union ministries—commerce and industry, railways and agriculture— to understand what’s in store in the new government’s 100-day action plan, and beyond. The word in these circles is that many ministries might be asked to revise the action plan on account of being too conservative. Many have been cautious because they know accountability will be demanded on the 100th day.

So, there are two possibilities of rolling out reforms 2.0 under Modi Sarkar-II. First, the 100-day action plan may include only those targets that are reasonably achievable, with modest financial implications. Under this scenario, the big-ticket changes that require substantial resources will be left for the Budget, which is likely to be presented in early July. It’s learnt that the department of commerce may include the replacing of Merchandise Exports from India Scheme (MEIS) with another WTO-compatible scheme in its 100-day agenda. MEIS, for the record, is an export incentive scheme valued at Rs 32,000 crore (2018-19) which recently came under attack from the international community, as it does not conform to the prevailing norms of the World Trade Organization.

The second possibility though is the introduction of big-ticket reforms in the 100-day plan itself. A caveat is needed here—the 100-day action plan is an initiative of the PMO, as against the Budget announcements, to be prepared in the North Block and presented by the new finance minister. The question is: won’t PM Modi himself announce the big reforms of his second innings? A senior officer of the ministry of railways says that its big initiatives — building of two more dedicated freight corridors (DFCs) and a road map to increase speed across trains — may find a place only in the upcoming Budget, and not in its 100-day plan. DFCs are considered instrumental for raising the railways’ share of freight movement from existing 25% to 50% by 2032, he adds. Presently, two DFCs — the Western (Delhi-Mumbai; 1,504 km) and the Eastern (Delhi-Kolkata; 1,856 km) — are being built. There is potential for four more dedicated corridors — Mumbai-Chennai, Kolkata-Chennai, Delhi-Chennai and Mumbai-Kolkata.

3


In a written reply to ET Magazine’s queries, Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, said that no stone would be unturned to make India a $5 trillion economy, up from $2.9 trillion now. “Some of the initiatives to make India a $5 trillion dollar economy will be pursued hard. The next government will follow up initiatives such as Start-Up India, Agri-Export policy, Ease of Doing Business, etc,” he added.

For Modi of 2019, the biggest advantage emanates from the fact that he is no longer a novice to Delhi and its bureaucracy. And for rolling out reforms of huge size and scale, he does not need any support from some of his not-so-reliable allies. So, where’s the roadblock now? In 2014, Modi was new and yet to figure out the pathways of how the PM’s office functioned. In a month’s time, he, however, cobbled up a team of bureaucrats with a sprinkling of those he knew earlier and trusted— PK Mishra, Hasmukh Adhia and Amitabh Kant combined with others such as Ajit Kumar Seth, the then cabinet secretary who he retained for an extended tenure, possibly to bring in some continuity at the top. In contrast, Manmohan Singh had removed the incumbent cabinet secretary Kamal Pande, an appointee of the Vajpayee government, within a month of taking oath as PM in 2004.

It’s no secret that Modi as the chief minister of Gujarat (2001-2014) drove his policies by relying more on bureaucrats than his cabinet colleagues. But Modi as PM needed some skilled and experienced hands to anchor the economic ministries, in particular where major reforms were to take shape. But, call it talent deficit or lack of confidence in the majority of the BJP MPs, Modi ended up handpicking only those in whom he had total faith. Initially, Arun Jaitley was given three key ministries — finance, corporate affairs and defence. Another Modi pick, Piyush Goyal, a chartered accountant, was also given multiple portfolios.

Then, within six months of forming the new government, Modi got Shiv Sena leader Suresh Prabhu, also a chartered accountant-turned politician and a one-time favourite of former PM Vajpayee, to join the BJP and handle the ministry of railways. By the end of the tenure of the first Modi government, Prabhu and Goyal were together handling four key ministries — railways, coal, commerce and industry, and civil aviation. Also, in a 2017 reshuffle, Modi appointed four bureaucrat-turned politicians — KJ Alphons, RK Singh, Hardeep Singh Puri and Satya Pal Singh as ministers, ignoring the aspirations of many political veterans, mainly to expedite the functioning of key ministries such as urban development, tourism and power.

For PM Modi, 2019 is expected to be easier than 2014. The reason is simple—Modi has now grasped the dynamics of Delhi’s bureaucracy and he understands the strength and weaknesses of his political “A” team. He knows precisely who he can rely on, minimising the need for experimentation.

And that could make Modi’s priorities substantially different from what he began with in 2014. For example, after becoming PM for the first time, Modi abolished the Nehruvian institution of Planning Commission, a measure that was symbolic in nature. Then, he pushed his team to do away with 1,500 archaic laws— for example, under the Indian Aircraft Act, 1934, kites were considered as aircraft thereby requiring the same permit for flying aeroplanes and kites. Also, he ran some successful campaigns such as Make in India and Skill India which, however, did not yield desired results on the ground.

This time, Modi may roll out big-ticket schemes from day one, with the first priority being job creation. Unemployment, for example, was an issue in the recent round of elections, but the incumbent escaped the wrath of the voters as nationalism around the Balakot air strikes changed the narrative completely. Modi likely understands the full weight of this humongous 303 mandate. And with the team being ready from Day One, he is not likely to waste his time on slogan or symbolism.
0Comments
Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for Live Elections News & Results, Latest News in Business, Share Market & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service