After a decade of political wilderness, the return of the Bharatiya Janata Party (BJP) at the Centre has injected fresh impetus into the development momentum, the loss of which was the prime reason for the electoral rout of the UPA. Despite the dream team of core reformers headed by the noted economist Manmohan Singh, UPA saw its fortunes sliding perilously with the country's economic growth rate halved in the last couple of years. Thanks to the monumental mistakes of the UPA in its ill-designed egregious programmes to improve the well-being of the weaker sections without ensuring the money to run them, the BJP, with the charismatic charm, grit and spunk of Narendra Modi, has romped home. The party cruised comfortably on the wrath of the millions, cutting across social and economic barriers, heralding hope that better days are ahead.

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Ever since the victory of the BJP on May 16, the party has been flooded with counsels on its priorities — and how it should break free from the economic engagement of the past. Given the BJP's penchant for private sector development, many openly yearn for the rapid restoration of confidence of the investing community. Investment is the key to unlocking the underlying growth potentials and bridging the output gap in the economy so that land, labour and capital could be prudently used to accelerate the pace of development. Building physical infrastructure is one option to kick-start investment and the growth cycle, though many would be sceptical about the grandiose projects of building national highways, inter-linking rivers and jumbo development projects entailing power, railways, ports and aviation sector. Unmistakably, such massive projects would give huge labour productivity.

Here is the caveat. The share of micro and small enterprises in generating employment is at a high of 84 per cent in India. Hence, the need for policy changes in the labour market so that medium and large-scale industries could benefit from flexible labour laws by training, retraining and redeploying workers in labour-intensive manufacturing such as garments production, machine tools and industrial machinery. Focusing on improving the milieu for doing business is a priority area. There must be quick project clearances and a seamless approval system. Earlier, a complex and tardy regulatory system, which also included permission from the environment ministry for big-ticket proposals, had a crippling effect on growth.

The time has come to revive the agrarian segment. As agriculture is a state subject, the Centre can address the concerns of the states and devise steps to ensure free movement of farm goods. Reforms to the Agriculture Produce Market Committee (APMC) Act by de-listing fruits and vegetables would enable farmers to sell to anyone inside or outside APMC markets. By removing food processing from the list of small-scale industries, investments for building cold chains and modern amenities can be ensured.

The palpable lack of fiscal discipline in recent years has slowed down growth, leading to inexorably high inflation and current account deficit. So wasteful spending on a series of sops must end. The government must begin to marshal sparse resources for capital expenditure to build enduring assets. This will ensure growth and boost employment. The Modi government can reform the banking sector with intelligent inputs from the globally credible central banker, RBI Governor Raghuram Rajan, who can fix the faults, and work towards financial stability.

The author is a freelance journalist