After the assembly elections concluded and as the poll results are awaited on Sunday, Narendra Modi's government has taken some key reforms.
1. The big state elections are over for now, and there is no way opposition can leverage government's move of hiking gas prices by painting it as anti-people to reap benefit in polls. By putting a caveat on Reliance getting the added amount in its production from D1& D3 gas fields in KG-D6 block where output should have been 80 mmscmd but is languishing at less than 8 mmscmd, government hopes to counter allegations by parties like AAP.
2. The move of de-regulisation of diesel is an extremely politically sensitive decision. It can well lead to stark increase in diesal prices if crude prices increase in future leading to adverse effect for poor people, farmers etc. But by biting the bullet now, when prices will actually go down, government hopes to neutralise the criticism of opponents for the same time. It will be left to see though if the government can truly leave diesal prices to be controlled by market especially when elections are round the corner.
3. The economy is in the path to recovery and by effectively ending the fuel subsidy it will help government to use that money effectively for targeted development schemes. The government is also looking to relaunch direct cash benefit scheme, a brainchild of UPA government. The goal is to ensure that subsidy reaches those who actually need it.
4. Finally Narendra Modi, by taking the tough decisions is trying to send a message to the industries and also to people. It is that government will look to go for big ticket reforms as and when it has the legroom to do it. So it will likely to be a balancing act between populism and reforms in the coming years. The government will go for reforms in opportune moments and may just bide time when the tide of politics is not in its favour.
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