Up Ahead: Baby Steps Reforms

As the days go by it is becoming clear to me that though there will be a reforms burst after the Presidential elections. At the same time, one can't expect radical reforms. Diesel price hikes will correct some of the madness going on due to months of inaction. In the insurance and mutual funds industry, there might be some moves to get the distributors interested. I am not sure whether that will be enough. One can practically rule out any kind of fiscal stimulus since government doesn't have anything in its bag and is lagging way behind in revenues.Some forward movement in single brand retail, pensions and GST, even a firm date of GST implementation next year will help matters. There are two areas where the government will be keeping its fingers crossed  and both deal with inflation. It will hope that the monsoon isn't too bad. It never is perfect and whenever it is too good our country can't handle it with floods and waterlogging give everyone a hard time. Incidentally, what a sad situation it is for an aspiring economic superpower to be dependent on monsoon? That's basically depending on good luck, by the way! If the government can get the bureaucracy to act on the files instead of sitting on them, it will also constitute reforms in my eyes! The other aspect of inflation that the government will be banking on is the base effect of the indices. This will give people an illusion that things are getting better. Of course, the larger question is, are they? For an answer just try buying vegetables and groceries. The high and still rising prices will make you laugh in exasperation. Did anybody say live entertainment?  

How Not to Sell Reforms:Retail FDI

When it comes to selling economic reforms to its people,  the Indian government will walk away with the top prize for doing the worst job across the globe. Otherwise, how can you explain the sudden mad way of first announcing retail FDI approval without tryin to reach any political consensus. Don't tell me that the ruling party forgot that it is minority in the Parliament. More than that did it even try to tell people why this is beneficial to the people? Now hare-brained is that? How do you expect public support when you don't communicate? The other problem is that when government representatives even try and communicate to people--and that happens rarely--it is in an idion so alien to the common people. Of course, let;s also not get fooled by the uproar in some quarter. The couple of thousand marketing agents who procure agri-produce across the country are seriously powerful. They have practically stalled agri-marketing reforms, part of overall agri-reforms. They influence the political class across the board.

Of course, if you are a sucker for conspiracy theories as some journalists are, you could argue (without hard evidence as some are doing now) that the government's retail FDI move has been not usher in reforms but to distract people and expose the political opposition. If that were to be true, we can put that down  in the column of dreadful tragedies.