Uttar Pradesh assembly election results 2017: BJP big win will help push key reforms, say officials

“Tackling the problem of non-performing assets (NPAs) is more a political call. The results will galvanise action on this and also expedite action on the strategic sale of PSUs,” the official said.

Written by P Vaidyanathan Iyer | New Delhi | Updated: March 14, 2017 1:43 am
Narendra Modi, Modi Assembly results, Election 2017, Election results, BJP Modi, Modi BJP, UP Modi, UP results, BJP UP,  BJP opponents, BJP dominance, Congress, BJP Congress, India news Prime Minister Narendra Modi PTI Photo

THE phenomenal win for the Bhartiya Janata Party (BJP) in the Hindi heartland — combined with the perceived symbolism that this was a vote for development — will make it easier for the Centre to push through key reform measures, say government functionaries. An official in the Prime Minister’s Office said the election outcome, which comes in the backdrop of demonetisation, is a signal that people want the Centre to take bolder steps to stem black money, root out corruption and bring back illegal money from abroad. “Tackling the problem of non-performing assets (NPAs) is more a political call. The results will galvanise action on this and also expedite action on the strategic sale of PSUs,” the official said.

Top economic managers also say reforms will continue and, in fact, now gather speed. “The last bastion of caste politics has come around and voted for development. Finally, even Uttar Pradesh wants good governance and growth,” said Arvind Panagariya, Vice Chairperson, Niti Aayog. “I expect continued reforms while ensuring that the poor receive what the Prime Minister promised,” he said.

Given the size of Uttar Pradesh, both in terms of population and size of the state Budget, a strong development-based agenda can yield good dividends over the next couple of years, said Neelkanth Mishra, India Equity Strategist, Credit Suisse. In 2016-17, UP had a Budget of Rs 3,46,935 crore, more than 17.5 per cent of the Union government’s total expenditure.

“Uttar Pradesh accounts for 16 per cent of the country’s population. The size of its Budget is almost 20 per cent of the Centre’s Budget. But the state contributes just 11 per cent to India’s GDP,” pointed out Mishra of Credit Suisse. Better Centre-state coordination can boost its output and the state can add more to the national economy, he said.

While the Goods and Services Tax (GST) regime would have taken off in July this year irrespective of the election outcome, the Centre’s efforts to reform labour laws is likely to get a fillip. “Major work on labour (reforms) is more or less ready. The opposition to tough legislative reforms from the Opposition will be milder. The goodwill earned by the BJP will be respected by the Opposition,” said Mishra.

Former Chief Economic Advisor Arvind Virmani, who is now chairman, Policy Foundation, too said political opposition to the government’s economic policies would likely cease, both in the Rajya Sabha and among party and affiliated organisations. The “low-hanging fruits”, he said, are certain policy and institutional reform measures announced earlier. “Among these are the introduction of Direct Benefit Transfers for kerosene, food and fertiliser subsidies; acceleration of promised labour law reforms (amalgamating 44 labour laws into four sets of labour codes); promised strategic sales of public sector units, solution to the public sector banks’ bad loan problem,” he said.

When asked if the government can take cues from the election outcome to take bolder steps to tackle black money, Virmani said, “Demonetisation clearly did not play a negative role, though the extent of positive influence is difficult to determine from limited data. Any further steps on this matter are likely to run up against another declared objective of the government, namely to end ‘tax terrorism’, which is far more important for the growth of the economy and employment. So I hope that the government puts more emphasis on the latter objective than the former.”

Analysts, however, do not expect tough bills in the Lok Sabha or the Rajya Sabha given that the government is already at the end of its third year. “Labour reforms will happen. It’s more about many different laws being merged and codified into simple and lesser number of laws,” said Credit Suisse’s Mishra. He said the ruling party’s numbers in the Rajya Sabha will be bolstered next year, and it will not be before 2020 that it will have a majority in the Upper House.

Explaining how political strength helps resolve the NPA problem, Virmani said, “Any decision will be criticised by Opposition parties. However, with its hands strengthened by the electoral verdict, the government is in a stronger position to deal with any criticism. The key here is to take and implement decisions quickly, rather than to search endlessly for a perfect solution (which does not exist),” he said.

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  1. S
    Shensha
    Mar 13, 2017 at 4:28 pm
    Now at least he must ctrdit 15 lakh in up voters account and also uttsr akhand voters account
    Reply
    1. S
      Shensha
      Mar 13, 2017 at 4:26 pm
      Now modi should start doing some work snd stop giving lectures
      Reply
      1. S
        Sonu Malik.
        Mar 14, 2017 at 2:12 am
        Main thing is good education within the constraints of economics. The reservation in teaching posts must end so that people can get the best education and hence can contribute to the development of India. It's a political call but the bullet has to be bitten.Jai Hind.
        Reply
        1. A
          ak dev
          Mar 13, 2017 at 2:29 am
          Pro poor reform will gather momentum. Next two years will be full of actions in Modi government.
          Reply
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            ashok s
            Mar 14, 2017 at 2:52 am
            Every time a netizens or common man hears key reforms , their price hike in essential commodities like fuel, milk, pulses etc etc . is that reforms or reforming price hike. Everything is same and will remains same . where ram mandir . where stands jaago grahak jaago . only beneficiaries of reforms are crony capitalist .
            Reply
            1. D
              Dr.Damodar Biswal
              Mar 13, 2017 at 5:23 am
              That would be great,sir.Good for our economy n country.
              Reply
              1. F
                Firstpost Commenter
                Mar 13, 2017 at 2:35 pm
                Hope NPA problem is solved soon
                Reply
                1. S
                  Sriniwasan
                  Mar 13, 2017 at 5:20 pm
                  Garv se Kaho Hum Hai Hindustani
                  Reply
                  1. L
                    Lannister
                    Mar 13, 2017 at 4:32 am
                    Now it's time for Modi government to go for Ram Mandir and to impose uniform civil code for Muslims.
                    Reply
                    1. I
                      Ivan
                      Mar 13, 2017 at 7:10 am
                      Reducing NPA essentially means a write off of bad debts, taking over pension or provident fund liabilities and laying off workers. A write off of bad debts is a certainty. Of the other two we cannot be sure. The capitalists win hands down. That is all it means.
                      Reply
                      1. P
                        P.THAPAR
                        Mar 14, 2017 at 2:29 am
                        IF U.P NEW GOVT.WANT TO HAVE MUSLIM FACE IN MINISTRY,I SUGGEST OBAISI(AM I RIGHT IN HIS NAME SPELLING?)HE IS EDUCATED ,LOOKS QUITE INTELLIGENT. I BELONG TO R.S.S,BUT STILL THINK HE IS RIGHT PERSON FOR DEVELOPMENT OF U.P
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                        1. G
                          George Cruz
                          Mar 14, 2017 at 12:33 am
                          The Indian citizens have given the BJP an overwhelming victory in the just concluded elections and the BJP has now enough votes to p important reforms for the country's progress and economic development. The Indian citizens have shown their displeasure and anger at the left oriented opposition parties who have been blocking every proposals made by the BJP and have been defeated decisively in the just concluded elections.
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                          1. M
                            manu
                            Mar 13, 2017 at 5:47 am
                            Ideally during next terms article 370 should be thrown to the windsss
                            Reply
                            1. M
                              M.P.Rao
                              Mar 13, 2017 at 3:56 am
                              This is the best time for getting the women's reservation ped. All three i.e. Mulayam Singh Yadav,Laluprasad Yadav and Saran Yadav are spent force.The opposition will have to think twice before playing obstructionist tactics.
                              Reply
                              1. P
                                Prakash dunakhe
                                Mar 13, 2017 at 2:59 pm
                                Write off is not the only solution. BIG DEFAULTER S need to be taken to task. Insolvency provisions tougher company law and forfiture and quick disposl of such property's should be tried. In fact borrowers have been tempted to defaults and new borrowings by incessent waivers and write ocfs. Deterents and fear of law is the necessity and considering the present mood of the rulling Gov. it is likely to happen
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                                  Paul Kurien
                                  Mar 14, 2017 at 7:51 am
                                  I hope that the BJP changes the status of UP as one of the BiMaRU states. This will also reduce the hordes of migration from the cow-belt states to other parts of the country. Similar to Bihar, UP is one of India's most populus, illiterate, castist and poor states. Hope the BJP improves this situation. Also, UP should be divided into smaller states so that there is quick and equal growth of the region.
                                  Reply
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                                    pradeep
                                    Mar 13, 2017 at 3:10 am
                                    The poor will now dream of BMW and MERC like the people they voted .happy going!
                                    Reply
                                    1. N
                                      Needhi
                                      Mar 13, 2017 at 7:44 am
                                      Hope that happens. We heard the same speech in 2014. He needs to travel in india to understand its culture. He has still no clue about rural india especially south.
                                      Reply
                                      1. R
                                        Rushi
                                        Mar 13, 2017 at 9:03 pm
                                        I think somebody ate Mirchi! Get Well Soon Shensha!
                                        Reply
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                                          seshadri
                                          Mar 14, 2017 at 2:12 am
                                          if 15 lakhs is credited in every account nobody will work every body will be lazy
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                                            mohd shariq
                                            Mar 13, 2017 at 4:04 pm
                                            Sir ,salute to u.people like u want to see India to grow and not like people with narrow mindset
                                            Reply
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