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Created on Sunday, 17 July 2016 03:01
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The Finance Ministry pulled a dead rabbit from its hat on 6th July 2016 by announcing formation of a high-profile committee to “examine the desirability and feasibility of having ‘a new financial year’.” This idea has been revived, debated & buried time and again with zero outcome over the last 146 years!
Has the Ministry run short of reforms initiatives? Or does it want to flaunt the intended change in financial year (FY) as flagship initiative of Transforming India campaign?
The Government should reconsider its decision. The Ministry should wind up the committee before it settles down to work. Alternatively, the Committee’s mandate should be altered. It should be asked to study unimplemented and failed reforms in the financial domain and recommend steps for their revival.
This is the 10th time since 1870 that the idea of shuffling the start and close of 12-month financial year (FY) is being considered primarily to improve budgeting and governance. The ultimate outcome of the latest initiative is also expected to be status quo as unanimity on this issue is impossible to achieve as happened in the past.
Moreover, the intended change is not worth the web of legislative and administrative efforts that would be needed in shifting FY that currently begins on 1st April and ends on 31st March. The change might perhaps also require amendment of Article 366 of the Constitution as suggested by an earlier committee.
Read more: Drop Idea of New Financial Year; Focus on Tough Reforms
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Created on Friday, 13 March 2015 07:11
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(PM & FM at Vibrant Gujarat Conf.- Edited image courtesy: PIB)
NDA Government is wedged in a piquant situation. Its Prime Minister Narendra Modi is a reforms visionary, a dream merchant and a calculated risk-taker. His most important Cabinet colleague, from the growth standpoint, on the other hand, believes in real politik. Finance Minister Arun Jaitley is also averse to taking political risks as is evident from his pre & post-budget reactions to the idea of big-bang reforms.
His cautious approach towards reforms is evident in his decision to defer a call on recommendations of four reports of tax administration reforms commission (TARC), first report of Expenditure Management Commission (ERC) and non-binding recommendations of 14th Finance Commission (FFC).
Mr. Jaitley had set up ERC for seeking guidance on urea pricing reforms, an issue his two predecessors talked loud in their respective budgets. Both, however, did not dare to bite the bullet.
The dichotomy between the styles of Captain (PM) & the Lieutenant (FM) is constraining the pace and depth of economic reforms. Add to this the lacklusture performance of certain ministers. The resulting picture of NDA’s overall performance would turn out to be modest. This, in turn, has subdued the optimism that the nation exhibited in May 2014 when BJP won the Lok Sabha polls with stunning majority that no one dreamt.
To fulfil the public’s core expectation that BJP-led NDA Government would be different from UPA regime, Modi Cabinet would have to take bold initiatives including unpopular ones and implement them well.
Before suggesting a few big bang ideas that Mr. Jaitley claims no one has given him, consider first Mr. Modi’s crucial statement on reforms.
Read more: FM Should hug Big-bang Ideas to Realize PM’s Vision for Speedy Reforms
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Created on Sunday, 01 March 2015 19:55
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FM arrives to present budget 2015-16. (Edited image: Courtesy PIB)
Truth is stranger than fiction. This cliché has got a fresh lease of life with Finance Minister Arun Jaitley claiming that NDA Government is being criticized for being “too fast.”
Mr. Jaitley’s observation should be viewed as Government’s response to growing chorus of disparagement from the left, the right and other quarters. The news stories have linked FM’s comment to HDFC Chairman Deepak Parekh’s observation that the businessmen are getting impatient as nothing has changed on the ground in the first nine months of Modi Government.
While Mr. Jaitley’s comment sounds more of an exercise in make-believe, the Power Minister Piyush Goel’s rebuttal to HDFC Chairman smacks of aversion for healthy criticism. Mr. Goel reportedly stated: “The shares of Deepak Parekh's companies HDFC and HDFC Bank have been doing well. If he is unhappy about some personal matter, then he should speak about it.”
Unlike Mr. Parekh, CPI (M) stalwart Sitaram Yechury has mocked at Modi Sarkar. In an interview with daily, Mr. Yechury dubbed the new Government as UPA III as it taking UPA II policies to logical culmination.
There are different set of facts available in public domain to corroborate respective views of Mr. Jaitley, Mr. Parekh and Mr. Yechury. The truth about Government’s performance would thus lie not in black and white but in different shades of grey. And the grade of the shade depends on how and with which yardstick one compares Modi Government’s performance with UPA’s.
As the Government of the day is always subject to 24x7 scrutiny by TV channels and the social media, the ministers should exhibit the statesmanship to turn criticism into an opportunity to speed up good governance and growth. They must show the political will to clear mountain of pending reforms, both mundane and complex ones. Let their concrete actions silence the critics, if not convert them into admirers.
The need for pursuing such an approach gains urgency if we factor in the feedback from within BJP, NDA partners and the BJP’s humiliating defeat at Delhi State Assembly polls.
Answering a question in a free-wheeling discussion organized by a daily in December 2014, former NDA Minister Arun Shourie stated: “I don’t want to use harsh words but the consensus seems to be that when all is said and done, more is said than done. I am sure sincere efforts are being made and they may yield results, but as Akbar Allahabadi said, ‘Plateon ke aane ki awaaz toh aa rahi hai, khaana nahin aa raha’ (The plates’ sound can be heard but the food is not coming)”.
This column builds on Mr. Shourie’s pithy observation by citing just five facts. These would prove that Mr. Jaitley’s claim of Government acting too fast is nothing but a witty remark. The list of such facts is too long to befuddle any reader.
Read more: Govt should check facts before proclaiming itself as ace runner
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Created on Sunday, 15 February 2015 20:05
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Paddy field: edited image courtesy-FACT
The budget session of Parliament is expected to witness fresh political slugfest over the land ordinance in particular and ordinance raj in general.
The Finance Minister Arun Jaitley has justified the land ordinance on various counts, one of which is to avoid India becoming “a nation of incomplete projects.” He has contended that ordinance would help farmers earn higher price for their land.
Congress leader Jairam Ramesh, on the other hand, has claimed that ordinance is a blow to farmers. He likened it with the erstwhile the Prevention of Terrorism Act, 2002 (POTA), which NDA Government had ushered in through an Ordinance and which the UPA Government repealed through an ordinance in 2004. Mr. Jairam dubbed the land ordinance as promotion of terror against farmers.
Polemics aside, the fact is that we have been a country of incomplete projects, non-starter projects and unrealized dreams for decades. This trend emerged much before the enforcement of the new land acquisition law on 1st January 2014 and its amendment through ordinance on 31st December 2014. And this anti-development, anti-jobs phenomenon would continue as laws alone can’t facilitate rational allocation and use of scarce land including the one bearing minerals and renewable energy. Forget fresh land acquisitions, the governments have at times failed to launch or complete projects on land that they own for many years.
Thus, both UPA and NDA are at fault for their narrower agenda for land legislation. Both the alliances have neglected a holistic perspective on land to minimize the need for fresh land acquisitions and to reduce related social conflicts.
Read more: Don’t let national development become hostage of land politics
