For Budget146;s sake, reforms get early push

In what is turning out to be a deliberate strategy to ease the passage of the Finance Bill, the Prime Minister and his team are gently usher...

In what is turning out to be a deliberate strategy to ease the passage of the Finance Bill, the Prime Minister and his team are gently ushering in a series of reform measures even before the Budget is announced in Parliament next week.

This will give them the freedom to keep the Budget free of any radical reform announcements that could raise the hackles of the Left parties. At the same time, the Government8217;s own agenda will remain on track, but without the fanfare.

The Prime Minister is also trying to drum up the support of other political parties so that India does not lose its big chance to catch up with China as an economic superpower.

Tomorrow, he is hosting breakfast for leaders of the Left parties. UPA chairperson Sonia Gandhi and Finance Minister P Chidambaram will also be present.

Yesterday, the PM met former prime minister Atal Bihari Vajpayee and Opposition Leader L K Advani. While officially the leaders had met to discuss the latest Indo-Pak peace initiatives, the presence of the Finance Minister gave away the fact that the forthcoming Budget was also discussed. Several reform measures have already been announced in the run-up to the Budget.

Yesterday, the Government said it was giving greater freedom to public sector banks to decide on mergers and acquisitions and link performance to pay. Earlier this week, the Employees8217; Provident Fund Organisation appointed consultancy firm Mercer to chalk out alternative investments that could bridge the shortfall of funds if the EPF interest rate is hiked to 9.5 per cent. The Cabinet is also scheduled to meet tomorrow afternoon to take up the issue of 100 per cent FDI in construction for commercial properties above 5,00,000 square metres. The issue had broad consensus when it came for discussion even in last week8217;s Cabinet meeting but was deferred on account of the Bihar elections.

Significantly, the Cabinet meeting tomorrow will take place only after the Prime Minister has met the Left parties in the morning. This will help it fine-tune its stand especially since the Left parties have said that they should not be taken for granted and they don8217;t just 8216;8216;bark8217;8217; but can also 8216;8216;bite8217;8217;. The policy statement contained in Part A of the Budget itself will focus mainly on Bharat Nirman8212;building of infrastructure in rural areas, urban renewal and socialist themes like a rural health mission, tackling urban poverty and employment guarantee for all the poor jobless.

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In terms of hard economics, it will touch on manufacturing and employment-generating industries in the textile, leather and handicraft sectors. Most of these are in line with the recommendations made by the National Advisory Council NAC and conveyed to the PM by Congress president Sonia Gandhi. Other reforms are being introduced more quietly.