No-show Monday

Does the economy need a government plan to revive investment? The answer is yes. Was the dose of changes in the overseas borrowing limit and the foreign investment limit in government securities the answer? No. The former is a procedural change that hardly qualifies as a policy measure. The current quota of investment in government papers by FIIs still has head room. So raising it,too,is not significant at this juncture. The economy still needs answers to questions that have loomed large in the wake of Budget 2012-13. These have to do with cutbacks in fiscal deficit through a reduction in subsidies,reform of tax laws like the goods and service tax,and more measures to increase foreign investment. None of these is expected anytime soon. The international commodity prices,for instance,have dropped to 89 a barrel and this means the current account deficit will soften. This also means that instead of the 50 billion of capital flows from abroad,the country can do just fine with about 35 billion in this fiscal. The bar has been lowered and so it was a good time to make some changes in petro product pricing. The government has apparently passed up this opportunity on Monday.

In any case,Mukherjee is winding up his term in North Block. June,one presumes,has been busy with other preoccupations,like the presidential election. If these steps were on the anvil,they could have been announced days ago or handed over to the new minister to deliver. Just what was the hurry about?

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