DSIJ Mindshare

Six Months Of Government: Pass Or Fail?


The first six month of any government is too short a time period to pass on any judgement about its performance. Nevertheless, it is enough time to gauge the intention and direction of the government’s plan. The first 180 days of the Modi government has clearly shown that instead of improving 1,000 per cent in one area, it is trying to improve one per cent in 1,000 areas. This government is less about radical legislative reform in its first six months in power and more about making the existing system work hugely better. This approach has resulted into an increase in project approvals and more environmental clearances. New investment project announcements have doubled from Rs 1.08 lakh crore in July-September 2013 to Rs 2.17 lakh crore in July-September 2014 while environmental clearance approvals rose by 79 per cent on a yearly basis to 111 cases in July-September.

Although Indic Inc. was expecting some path-breaking reforms immediately after the Modi government assumed power six months ago to kick-start the economy, nothing of that sort came and some might have been disappointed. But as highlighted in my earlier editorials, there are some reforms initiated by the government such as ‘Make in India’, ‘Swachh Bharat’, liberalisation of FDI in defense, railways and real estate that might not yield immediate results but will go a long way to accelerate economic growth.

What makes me confident that the government is on the right path is that despite no ‘big bang’ reforms announced till now, it is brand ‘Modi’ at work. He has a proven track record and has already demonstrated what he is capable of doing. He can lift the sentiment by replicating on the national stage the Gujarat model. But to operate in such a manner requires a real mandate and that is precisely what Modi now enjoys.

Regardless of what the government has done in the last six months there are some areas where legislative reforms are much required.

In our cover story we are talking about some of these crucial bills, which if passed will definitely help put the nation into a new growth trajectory. This will help the companies operating in these sectors to raise the required capital and improve their efficiency. The Goods and Services Tax (GST) Bill and the Insurance (Laws) Amendment Bill, 2008 are some of the bills that may come up for discussion and passage during the current session of the parliament and will have the government trying its best to get them cleared. Apart from these, the Factories (Amendment) Bill, 2014, the Apprentices (Amendment) Bill, 2014, and bills to replace the Coal Mines (Special Provisions) Ordinance, 2014 and the Textile Undertakings (Nationalisation) Laws (Amendment and Validation) Ordinance, 2014 along with amendment to the Land Acquisition Act are some of the important ones that may be tabled during the winter session.

Many of these bills were stuck due to either a lack of majority of the current government in the Rajya Sabha or stiff resistance on the part of the opposition to pass the bills. It is quite possible that some of these important bills may not be passed in this winter session too, but it clearly reflects the government’s determinism to usher in reforms. And the winter session is not the only time when the government can introduce new reforms and it is possible that more specific details will be announced during the presentation of the next Union Budget due in February 2015, which is just three months away.

In its first six months in power at the centre, the Modi government has achieved a lot as compared to what the previous government failed to achieve in many years. Most importantly, it has managed to change the way the government governs. It has removed inertia in governance by changing the work culture of the bureaucrats and living them a free hand to implement the policies.

The equity market that acts as lead indicator is already pointing towards “ache din” ahead. Bellwether indices are touching new lifetime high literally every week. The recent election verdict in two states also speaks a lot about the government’s performance and its approval rate. I am sure this issue of the magazine will give you a perspective on the important bills to be presented in the parliament and how this is going to impact your portfolio.

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