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How fast-tracking budget reforms could give Narendra Modi a stellar Independence day speech

Tuesday, 29 July 2014 - 1:45pm IST | Place: Mumbai | Agency: dna webdesk

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In the process of preparing for the Indian Indepandence Day on August 15, BJP is taking all the measures to awe its citizens, one of them being, ensuring that all the proposals that were put out in Budget 2014 are implemented in the coming weeks. The ministries have pulled up their socks and are ready to roll so that Prime Minister Narendra Modi can give his second big speech amid the air of celebration. 

Cabinet Secretary Ajit Seth has asked all the ministries and departments to get their acts together and roll out major decisions by August 10. The implementation of budget decisions is being monitored by the Prime Minister's Office (PMO) itself. "The idea is to get things rolling quickly. Most budget announcements are being given final touches to ensure implementation starts before August 10," said a senior official aware of the progress told Economic Times.

The directive to all departments this time is very clear—nothing should hold up the files and implementation once a decision is taken.

The start was made by the Cabinet when they cleared proposals to increase the FDI limit in the insurance sector, followed by defence and railways.

Also, the government is coming up with ideas to achieve the fiscal deficit target of 4.1% of GDP. It has promised to set up and Expenditures Management Commission which will suggest measures to reform government spending. The finance ministry is expected to form the Commission soon. Steps are being taken with respect to retrospective tax where a committee will interact with the industry on a regular basis.

The Modi government, which has been defending the budget, claiming it's the best that could be done in the present fiscal condition and growth, can have the desired impact on the public with efficient decision-making. But even with efficiency, their biggest challenge will be implementation of new schemes. 

Some of the schemes and ideas are very new and will take time to show progress. But if the implementations happen faster, it will be a welcome change. For instance, before Modi government begins asset creation and starts building housing facilities they need funds. These funds will be available once the government effectively implements Income tax reforms, opens up tenders for new projects and creates an environment that can attract greater private investment. This would again require tough decisions like those on retrospective taxation. Whatever be the stance of the government in this regard, transparency is the need of the hour for those who mean to invest in the country. As opposed to this, infrastructure development and asset creation would be more long term by the very nature of the business and investment.  

These are some decisions that can be implemented in a short period of time. And if done aptly, will lay a more lucrative path for better investment and growth. 

The budget has already been cleared by the Lok Sabha and Rajya Sabha. According to Finance Minister Arun Jaitley the budget is aimed at reviving the business in the country and getting the economy back on revival track.

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