DSIJ Mindshare

A Roadmap for Ache Din

The first Economic Survey presented by the NDA government has pegged India’s GDP growth for FY15 between 5.4–5.9 per cent. The Railway Budget presented a day before the Economic Survey was tabled was conservatism personified. No big promises, no new outlays; just a splendid roadmap for a T world class, futuristic and passenger-friendly service. The Budget too has been very much in line with what it should be, rather than what the general expectations were. All put together, the new government seems to be working in a direction to ensure that it stands true to the slogan which brought it into power - ‘Ache Din Aane Wale Hai’.

 The NDA has inherited an economy hit by its predecessor’s profligacy. From here on, there is an acute need to augment revenues and cut down on expenditure if the economy has to get back on the desirable growth path. Both Finance Minister as well as Railway Minister have done well in that direction. The budget presented by FM Arun Jaitley is the first test the BJP-led NDA government has faced. Some of the harsh decisions, necessary to put the economy back on track, had already been taken in the form of the petrol and diesel price hikes effected over the past fortnight, coupled with the hike in railway fares.

But there is a lot more yet to be done in order to pull the economy back from the fringes of poor growth and put it into the next orbit of prosperity. Inflationary pressures have already started rising once again and that is a big worry for the government. With the monsoon behind schedule, the situation could get worse going forward. Foreign trade is not at desirable levels and industrial output too has been struggling for long. All this calls

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for a synchronized and concerted eff ort on the part of the government. Under the Prime Minister’s guidance, the entire cabinet needs to work like a well-oiled unit, and from the initial looks of it, it seems that the ministers are doing so.

 Dalal Street Investment Journal spoke to the ministers in charge of the six very important ministries to know their plan of action which will help usher in Ache Din for India. Nitin Gadkari, Minister for Road Transport, Highways and Shipping, outlines the measures intended to be taken for enhancing critical infrastructure, while Dharmendra Pradhan, Minister of State (I/C) Petroleum and Natural Gas, has chalked out an elaborate plan to work towards energy suffi ciency of the country. One of the most important factors that will help kick-start stalled projects is to grant quick environmental clearances to them. Prakash Javadekar, Minister of State (I/C) for Environment, Forests and Climate Change, spells out his intent of pushing for development and taking care of the environment simultaneously; a feat diffi cult to achieve, but certainly not impossible. Infl ation has been the talking point of almost every sensible conversation today. Ram Vilas Paswan, Minister of Consumer Aff airs, Food and Public Distribution, is fi rm on ensuring stability in food prices; something that will ensure control over infl ationary pressures and help policymakers take some good decisions (bring down interest rates) to push growth. In a country of 1.25 billion, employment generation is one of the most important functions of government. Narendra Singh Tomar, Minister for Labour and Employment, spells out the government’s plan to put in place a proper employment plan for the huge pool of young talent that the country banks on for its future growth. Last, but not the least, Piyush Goyal, Minister of State (I/C) for Power, Coal and New and Renewable Energy, outlines the plans for this most important but beleaguered sector of power, coal and new and renewable energy. Read on for the perspective on what will bring in Achhe Din for India.

Nitin Gadkari
Minister for Road Transport, Highways and Shipping

Priorities set by Nitin Gadkari are of immense importance for the development of highway infrastructure in the country, particularly at a time when country’s economy is reeling due to stalled projects in every sector. In fact, the ministry itself has reviewed the situation for stalled projects since last 3-4 years and came to the conclusion that over 260 projects worth `60,000 crore under public-private partnership model have been stuck up due to various problems, including availability of fi nances and increasing NPAs.

 The new NDA government knows this fact very well and the prime focus of the government is speeding up implementation of infrastructure projects. In a very signifi cant development, Prime Minister Narendra Modi has suggested that various ministries responsible for infrastructure development such as Civil Aviation, Railways, Road Transport Highways and Shipping should work in tandem so that project implementation can happen at brisk pace. The responsibility for coordination between these ministries has been assigned to Nitin Gadkari by the PM and he will convene meeting of all these ministries on a monthly basis to resolve problems related to infrastructure projects.

 Already the Ministry of Road Transport has reviewed the progress of various road projects and discussed problems related to them with various state governments. Aft er these discussions, projects worth `40,000 crore have been accorded top priority by the ministry and issues relating to them will be resolved soon. The new EPC (Engineering, Procurement and Construction) model would be particularly helpful in the speedy implementation of highway projects as the government is also looking to arrange easy and cheap fi nance for this new model. In such a situation, EPC wiTheasy and speedy fi nancing seems to be a good option for infra projects.

 The ministry is also planning to spend more than `25,000 crore on road construction in J&K, Leh, Uttarakhand and Himachal Pradesh. Presently, infrastructure projects are facing problems relating to land acquisition, railway lines, environmental and forest department clearances and cash crunch facing the contractors. Considering this, the Ministry is also working with state governments to speed up the projects and hoping that these eff orts will soon deliver results and put Indian infrastructure development back on track.

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Dharmendra Pradhan
Minister of State (I/C) Petroleum and Natural Gas

One of the most important portfolios of the government is the Ministry of Petroleum and Natural Gas as currently India is importing more than 75 per cent of its crude oil requirement and it directly aff ects the fi nancial health of the country. Keeping this fact in mind, the new Minister of State for Petroleum and Natural Gas Dharmendra Pradhan has set clear priorities to achieve energy security via various resources that include both conventional as well as non-conventional sources like CBM, Shale gas, etc. The ministry is seriously working on the strategy to curtail import dependence, and to achieve this, the ministry will focus on TAPI (Tehran, Afghanistan, Pakistan, India) gas pipeline as well as Russia as there As far as economic development and progress of industrial projects is concerned, environment and forest clearance remained key roadblocks over the last few years. It is because of this factor that is potential in these countries to bring cheap oil and gas to the country. Also, there are deliberations going on in the ministry to reduce import dependence on few countries as the recent Iraq crisis has witnessed the situation going haywire.

Increasing domestic production is the top priority of the government and minister has chalked out a comprehensive strategy to improve the effi ciency of public sector companies such as ONGC, OIL, GAIL, IOC etc. so that domestic crude and gas production can be increased. For this, deviating from the earlier method of signing of MOUs yearly, the ministry has adopted a new mechanism to review PSUs’ performance on a monthly basis and for this the fi ft h day of every month has been fi xed. It is interesting to note that the minister is quite serious about the performance of PSUs because since last three years the production of oil and gas by these companies has either stagnated or declined.

As for the subsidies on LPG, kerosene and diesel, although the ministry is quite clear about reducing subsidies, it is also against putting the burden on the common man. In fact, the minister had categorically said ‘no’ to the LPG and kerosene price hike. The ministry is of the view that reforms need not be anti-poor and there should be improvement in effi ciency and benefi ts derived out of it should be passed on to consumer.

Prakash Javadekar
Minister of State (I/C) for Environment, Forests and Climate Change

As far as economic development and progress of industrial projects is concerned, environment and forest clearance remained key roadblocks over the last few years. It is because of this factor that many industrial and infrastructure projects were stalled, derailing the country’s economic progress. During the UPA’s tenure, out of the 419 large investment projects worth more than `1000 crore that were stalled, more than 40 per cent have been stuck due to environment clearance. Overall, the investment potential of these projects were of the tune of whopping `20,00,000 crore. Immediately aft er taking charge, Prakash Javadekar, Minister of State (I/C), Environment, Forest and Climate Change, has set out the agenda for speedy environmental and forest clearance in a transparent manner. First and foremost, a new system for online submission of applications for environmental clearances has been launched by the ministry and from July 1, 2014 all the applications for environmental clearances must be routed only via online route.

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 The Modi government seems committed in bringing in transparency, efficiency and predictability in functioning of Ministry of Environment and Forests. Soon application for forest clearances too shall be made online. The ministry is also working on a time-bound environmental and forest clearances and for this policy framework is being drawn up by the ministry and would be implemented soon. Sources in the ministry told DSIJ that the PM is quite serious about implementing policy-based decision making One of the biggest threats to the Indian economy in the present circumstances is infl ation. Rising prices, especially of food items has aff ected the overall economic plan for more than a couple of years now. Every eff ort to curb price rise of food items has failed. The new government clearly knows it has a stiff challenge ahead and is taking serious measures to solve this problem in a much more pragmatic way. The Union cabinet has already put onions and potatoes in the amendment of APMC Act which is very vital in order to ensure a control on infl ation. According to Paswan, the government is keen to restructure the Food Corporation of India so that effi ciency can be brought into the whole procurement process. Various strategic initiatives taken in Gujarat in the matter of procurement and management of food items are likely to fi nd their way at the Centre now that the PM is taking a keen interest in the overall administration. Implementation of the Food Security Bill across the country is on the agenda of the government as well. Th at, of course, could happen with some dilution or changes. in the matter of environmental and forest clearances and soon infrastructure would be put in place to expedite these matters without much intervention by concerned stakeholder and government departments.

 

The minister is also very keen to work with state governments in the matter of clearances so that delay in giving environmental clearances would be curtailed. The new regime has put sustainable development as its catchword and agenda for environment conservation and growth has been set around it. The ministry is of the view that industrial development and environment conservation can go hand-in-hand. The ministry has added “Climate Change” in the name of the ministry so that contemporary trends related to issues pertaining to climate change can also be brought into focus by the government.

Ram Vilas Paswan
Minister of Consumer Affairs, Food and Public Distribution

One of the biggest threats to the Indian economy in the present circumstances is infl ation. Rising prices, especially of food items has aff ected the overall economic plan for more than a couple of years now. Every eff ort to curb price rise of food items has failed. The new government clearly knows it has a stiff challenge ahead and is taking serious measures to solve this problem in a much more pragmatic way. The Union cabinet has already put onions and potatoes in the essential items list and fi xed stock limits of the staples so that steps can be taken against hoarders. The government has increased the minimum export price of onions to USD 500 per tonne as against USD 300 per tonne last month which is expected to curb exports of these items. In addition to this, it is selling cheaper potatoes and onions via its outlets and trying to convince state governments to take a strict action against hoarders.

The Ministry of Consumer Aff airs, Food and Public Distribution is all set to amend the Agriculture Produce Marketing Committee (APMC) Act, for which, state food ministers met under the aegis of the Food Ministry to discuss the changes desired in the Act. The Centre is nudging state governments to exclude fruits and vegetables from the APMC Act so that farmers can sell their produce directly in the open markets. The Food Ministry has already formalized a draft for the amendment of APMC Act which is very vital in order to ensure a control on inflation.

According to Paswan, the government is keen to restructure the Food Corporation of India so that efficiency can be brought into the whole procurement process. Various strategic initiatives taken in Gujarat in the matter of procurement and management of food items are likely to fi nd their way at the Centre now that the PM is taking a keen interest in the overall administration. Implementation of the Food Security Bill across the country is on the agenda of the government as well. Th at, of course, could happen with some dilution or changes.
 

Narendra Singh Tomar
Minister for Labour and Employment

Creating meaningful employment is the topmost priority of the government and it has already started taking concrete steps in that direction. According to Narendra Singh Tomar, Minister for Labour and Employment, the ministry is already working on a time-bound agenda to perk up the subdued employment market. For this, it has adopted a strategy to promote skill-based training to be imparted to the country’s youth so that they become employable. The government has also mooted an idea wherein all the employment exchanges will be converted into career promotion centres so that dedicated skill-based training can be imparted to the 

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unemployed youth in those areas where a work force is needed.

In addition to this, the government is seriously working on revising and upgrading the course syllabus at ITI. Th is task has already commenced under the Directorate of Employment and Training. The ministry is also looking towards implementation of international labour laws so that the confl ict between industry and workforce can be minimized. Tomar is of the view that to implement such best practices, there needs to be greater co-operation among all the states and the Centre, as labour laws are in the concurrent list of the Constitution. Corporate India too has been of the opinion that labour laws need to be changed and brought in line with international practices to ensure better applicability.

The government is also taking concrete steps to provide social security to labourers in the unorganized sector. For this the paradigm of National Health Insurance scheme is being expanded. Accordingly, the government will soon start a campaign to identify and register eligible 47 crore workers with the help of various state governments. In addition to this, employees of the unorganized sector and non-resident Indian employees will also be allowed to take benefit of EPFO’s universal account.

Piyush Goyal
Minister of State (I/C) for Power, Coal and New and Renewable Energy

The Modi government has come into power on the plank of development and to be successful in fulfi lling the aspirations of the people, it is the performance of Ministry of Power that would prove most crucial in the next fi ve years. The Prime Minister knows this fact well and as a step towards achieving that a bold move was taken to club the Ministry of Power, Coal and New and Renewable Energy to ensure better co-ordination. Th is step becomes crucial considering that under the earlier regime there was complete chaos in the relationship between power generators and suppliers of fuel, mainly coal. The ministries concerned were indulging in blame game for nonperformance. Clubbing the power and the coal ministries is a good step towards preventing such scuffl es and ensuring more synergy between the two.

The main priority spelt out by Piyush Goyal, the Minister of State for Power, Coal and New and Renewable Energy, is to provide 24X7 power supply to everyone in the country in the next fi ve years, be it cities, towns, villages or even border areas. For this, the ministry is focusing on all occupants and off -grid solutions for everybody. Moving fast in this direction, the ministry has approved nine transmission projects worth `12,500 crore that were stuck in the approval process for many months. These projects will benefi t several states, including Haryana, Chhattisgarh, UP, MP and Maharashtra by enabling high capacity 765 KV lines carrying up to 2,100 MW each.

For improving the power situation, the ministry is aggressively focusing on fuel supply, mainly coal, and it has already started the process of rationalization of coal linkages. It has been made clear by the minister that reforms and restructuring of the coal sector cannot be perceived as the privatization or disintegration of Coal India. Already a process of transparent auctioning of coal mines that involves a competitive mechanism has been started. 

In addition to revamping the structure of the power sector, the ministry is also focusing on new and renewable sources of energy and the prime focus on this front would be on solar and wind. For this, the ministry is looking for tailor-made innovative solutions of supplying power across the country, wherein power will be supplied in combination of solar and wind power along with coal generated power. 

The ministry will also organize a Global Investors’ Meet for renewable energy sector in November 2014 and for solving the problems faced by renewable energy players, a quarterly meeting is sought to be held.

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