NOVEMBER 27, 2014

By TIOL Edit Team

NDA Government is sending nebulous signals on economic reforms and good governance. Both these issues require clarity as the Government is fully in the saddle after completion of six months.

NDA is also faced with the Congress' charge of taking U-turn from its manifesto position on certain issues. It has to certainly effectively reply to Congress stalwart Kamal Nath's dig. He said: "This is a treadmill government. The government seems to be moving but in reality it is doing nothing."

In an interaction with PTI journalists, Finance Minister Arun Jaitley stated that a "whole set of second generation reforms" will be unveiled in the next Union Budget. He reportedly promised "a lot of exciting time ahead".

Why wait till the budget? Does the continuing fall in global prices of numerous commodities and consequent decline in domestic inflation not adequate to spur the Government into taking timely decisions?

About a fortnight earlier, Mr. Jaitley observed that some second generation reforms required "larger consensus." He elaborated: "there are a large number of reforms which people have broadly referred to as the second generation of reforms which have to take place in this country. Some are very easily implementable, some require a larger consensus and some are extremely difficult to implement."

Mr. Jaitley was effectively countered by his predecessor P. Chidambaram on the issue of retrospective taxation at a book launch event. Mr. Chidambaram reportedly said: "If I had 282 MPs, I would have passed a simple legislation that is required to undo it." Mr. Jaitley retorted the government did not want to take the legislative route to negate the stand of the government of India.

Mr. Jaitley said: "We have to go at a pace that the political system can take." One wonders why Mr. Chidambaram or some journalist present at the event reminded Mr. Jaitley that there can be no bigger consensus that unanimous resolutions passed by both the houses of Parliament.

Do we need to repeatedly remind the Government of the day to show the political will to implement such resolutions in letter and spirit? It is bizarre situation with the Opposition egging the Government to take reforms and the latter defending non-action under the alibi of generating consensus.

The Government should put in public domain all reform proposals to be implemented over the next four-and-a-half years. It ought to specify the so-called difficult reforms especially the ones that require a new legislation or an amendment to the constitution, an area where ruling alliance's minority status in Rajya Sabha is a handicap.

It should issue a consultative paper on each contentious reform instead of repeatedly buying political comfort under the garb of generating consensus. Common sense suggests that it is extremely hard to generate consensus in a democracy where caste, religion, sectarian and regional interests overshadow long-term national interests. And ruling political alliances of all hues are averse to taking unpopular decisions in the long-term interest of the country.

There are certain reforms that don't require legislative initiative. Many of them can be taken simply as decisions of the Government of India with some requiring Cabinet approval. There are many that simply require amendment of the rules.

There are certain reforms on which there is deemed consensus or there is no need for seeking explicit consensus. A case in point is strengthening of numerous regulatory and institutional bodies as well as public enterprises.

If the Government lacks the political will to delegate powers to its entities, the least it should do is to not weaken them.

We fail to understand how the Government of the day can afford to let Central Board of Direct Taxes (CBDT) function without five members and reduce it to a two-member body. This is perhaps unprecedented situation for an Authority entrusted with the generating revenue for the country.

(http://www.irsofficersonline.gov.in/CBDTCorridor.aspx.)

CBDT is not an exception. The Board for Reconstruction of Public Sector Enterprises (BRPSE) is without its Chairman and two non-official members for several months. Revival of several enterprises such as Madras Fertilizers Limited (MFL) has been delayed.

Anti-corruption bodies have been maimed by decision-making paralysis. Three-member Central Vigilance Commission (CVC) is without a chairman and a member. The Central Information Commission (CIC) is also headless. Lok Pal has not yet been constituted.

Several other crucial institutions have not been re-constituted. Several other have not met once during the last couple of years. This is certainly not the good governance for which the masses voted for the BJP. The UPA's legendary policy paralysis persists in several sectors.

The Prime Minister Narendra Modi should ask Cabinet Secretariat to identify governance deficits in each and every sector and fix a timeframe for removing them. At the end of five-year term, it is action and not the word that are counted by the voters.

It is better to go out of power while taking tough decisions in the country's long-term interests than regularly blaming the predecessor for the economic mess and pleading for consensus on reforms. NDA should consider striking a balance between hyper-caution (read enjoying political power) and reasonable risks (read good governance).