No Proof Required: Watch what we do, not what we say

2014 will be remembered as the year India comprehensively rejected its old mindset and changed course.

Prime Minister Narendra Modi Prime Minister Narendra Modi
Written by Surjit S Bhalla | Updated: July 19, 2014 8:09 am

Budget July 2014 was supposed to be a major policy statement of the first non-Congress elected majority government in India’s 66-year history. Expectations of a solid reform statement were high, if not higher; the opportunity for a vision statement was never so palpable; the faith in and credibility of what the finance minister would say was never more; and the goodwill generated by the election result for the BJP was only matched by Rajiv Gandhi’s 415-seat victory in 1984. So what happened post-Budget 2014? Everybody (100 per cent) criticised the speech, and many felt that Narendra Modi, Arun Jaitley and the BJP (in that order) had missed a historic opportunity. So much so that one senior and seasoned journalist called it a Chidambaram budget with saffron lipstick. Ouch, that must have hurt.

What Swaminathan Aiyar said was a valid reasoned opinion, albeit somewhat different from my own impression of the budget as the best content-wise in the last two decades. I had also mentioned in my budget review article (‘From hope to reality’, IE, July 11) that, in monotonous delivery and in preoccupation with minutiae, the budget seemed to be nondescript and certainly not revolutionary. However, while the devil in the budget was in the detail, the angel of reform was there, in abundant display, in the content.
Just look at the evidence.

On labour reform, what every reform commentator has been crying hoarse about for decades is happening. A big step has been taken by the Rajasthan government (a BJP enclave) to reform labour laws; however, the reformed laws should not have prevailed even in 1960s India. Such reforms still have a long way to go, but considerable progress has been made from the original 1860 labour laws, conscientiously followed by every Indian government. Haryana (Congress-ruled) has now joined the movement to make our draconian labour laws effective only if the firm has 300 employees. This is not reform but significant progress from the previous mindless law that stipulated state intervention for firing of workers if a unit had more than a hundred.

Also, state governments are now getting together and collectively demanding that the Neanderthal land acquisition act, passed by all parties, be changed to something that the people of India want, and not what the entitlement-socialist Congress brigade wanted. This could be a game-changer.

On tax reform, suddenly, unlike with the Sonia Gandhi government, the previously not possible is now feasible and likely. The much needed and overdue national Goods and Services Tax is likely to be in place by February 2015 and very likely, the overdue reform on personal and corporate income taxes will also happen by then. Don’t be surprised if corporate taxes are also reduced. And cesses and surcharges become part of (bad) Indian tax history. And the irresponsible corporate social responsibility rules either significantly reformed, or junked.

Agriculture is a large, important sector where the heavy hand of government has been …continued »

First Published on: July 19, 2014 12:18 amSingle Page Format
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