Roadmap ahead for

the new
Government

-Mimansa Popat,
Xavier Institute Of Management,
Bhubaneswar

16th May, 2014, history was written.

Modi wave sweeps India, BJP wins
election with a landslide, Change of
Power in India, Modi all set to be PM,
BJP got majority on its own, was what the
media had to say for days after the election
results were announced. The BJP- led
NDA claimed a landslide victory. Not
only did India witness them win with a
massive number of 336 seats but also
witnessed BJP achieving 282 seats,
comfortably, on its own, without the
support of any allies.
This clean sweep shows that the people of
India have voted for change. It represents
the desperation, exasperation, urgency and
at the same time, a ray of hope for a better
India. The people of India have become
aspirational; those living below poverty
line want to free themselves of the curse,
the middle class are aiming to become a
part of the upper middle class. Amidst
these high expectations from the people
and the difficult time that the Government
is passing through, to put the economy
back on its track, it is of paramount
importance to prioritize the reforms and
policies to be initiated and implemented.
At this stage, it is necessary to understand
and analyse the changes in polices or
regulations already undertaken by the new
Government. The first one of such changes
is the downsizing of the number of
ministries. Under the new Government,
there are 23 cabinet ministers as against
the 28 under the UPA Government. The
NDA government believes in the concept
of Less Government, more Governance,
and hence the ministries were downsized.
Moreover, due to this particular move, it
will be easier to identify the right officers
for postings, promotions, transfers for key

positions such as chief secretaries, cabinet

secretaries and revenue commissioners.
This move also ensures accountability and
transparency through objective analysis
and a continuous feedback mechanism.
Basically, through this reform, the current
Government followed what was said by
William Gladstone, a four time Prime
Minister of the United Kingdom, It is the
duty of the Government to make it difficult
for people to do wrong.
Moving on to the biggest hurdle faced by
the new Government since their win was
the Iraq crisis. This incident shook the
entire world with its brutality. Indian
nurses working in Iraq were stuck in the
middle of a civil war and here, at home,
the Indian Government left no stone
unturned to rescue Indian nationals from
war-torn Iraq. In this effort, the
Government deployed INS Mysore in the
Persian Gulf. And thus, was handled a big
issue by the Ministry Of External Affairs.
Despite these times of difficulty and
hardship, the Indian Government carried
out their initiatives for reforms such as:
i.

The PMO deciding the working

pattern of bureaucrats as well as
the ministers. This has led to a
domino effect, because in the
hierarchy conscious bureaucracy,
if a senior is working, it is bad
form for a subordinate to leave.
Moreover the increase in the
inquiry from the PMO, the
deadlines and the follow up
questions has been keeping the
officials on their toes.

ii.

Improving its taxation process in

order to facilitate direct contact
with the taxpayers

iii.

The MEA is set to waive the stage

of second-time police verification
in the case of passport renewal.
This would ensure a smooth and
hassle-free process

iv.

Six hundred and sixty rape crisis

centres named as Nirbhaya
Centres to be established across
the nation

v.

Kisan Mandis, i.e. farmer

markets to be set up across India in
order to fight food inflation and
also as a direct benefit to the
kisans of India

vi.

Approved the proposal to raise the

height of the Narmada Dam so that
more water is available for
irrigation, drinking and power
generation

vii.

Making X-rays, MRIs, CT Scans

free of cost to the poor at
government hospitals

viii.

Plans to plant two hundred crore

trees along the entire one lakh
kilometre long National Highway
Network across the country. The
Government is planning to
implement the similar scheme
under the MNREGA along state
highways, district and village
roads

ROADMAP: THE STEPS LEADING

TO A BETTER INDIA

The current price per million British

Thermal unit rate for gas is USD 4.2. This
would have jumped to USD 8.8 had the
Government not ordered a status quo on
natural gas. Oil Minister Dharmendra
Pradhan cities that this will continue till
September end. The new Government
should come up with a new formula,
against the one proposed by the panel
headed by C Rangarajan, to control the
price hikes in Natural gas. If the same
formula is followed, it would lead to an
increase of Rs. 2 per unit increase in power
tariff and Rs. 12 per kg hike in CNG rates;
all of this over and above the jump in the
fertiliser industry. Hence, a review
committee or a ministerial group should be
set up to come up with a better mechanism
to control these hiking prices and keep a
check on the same.

The Budget 2014-2015 focuses on

Collaborating to Construct India, in other
words, Public Private Partnership.
Recognising the crucial role played by
infrastructure in economic development,
Mr. Jaitley has allocated a whooping
amount of Rs. 37,000 crores to NHAI.
This is a clear indication that Infrastructure
development is a priority. Here, an
initiative to streamline the procedures for
private investors should be undertaken.
The following can be done to change the
tiresome mechanism to a hassle-free and
investor friendly PPP Cell:

i.

A single window agency for all the

necessary clearances. This would
help in a better and faster
implementation of projects

ii.

iii.
iv.

A State Level investment agency to

consider investment proposals.
This agency would then coordinate with a Central Agency for
the same
A Central Window Agency to
examine these proposals
To appoint project specific
consultants to develop the project
in accordance with the concerned
department

Here, it would be unfair if the effects and

benefits of the Gujarat Model are not
stated. The transformational characteristics
that are the highlight of the Gujarat Model,
are Power Sector reforms, Agriculture and
Water reforms, Infrastructure Build up,
Industry and Investment reform and health
care initiatives. The power sector reforms
boasts about high technology investment
which ensures 24*7, three phase power to
all homes in Gujarat. The new
Government is very keen on replicating the
better parts of the Gujarat model at the
national level at large. The incumbent
government has launched the Rurban
Mission borrowed from the Gujarat
Model for ushering infrastructure
development in rural India. For this, Arun
Jaitley has provided Rs 100 crore. An
existing PURA scheme will consequently
merge into the Rurban Mission. A greater
amount should be invested in schemes like
these through PPP so as to reduce the
migration from the rural to the urban areas.

There is a leakage of more than 40% in the

PDS throughout the country and this
budget stressed on the efficacy of the PDS
by restructuring FCI, reducing

transportation costs and distribution loses.

The government has also promised to
provide rice and wheat at reasonable prices
to the weaker sections of the society.
Moreover, it will also undertake open
market sales to keep prices and inflation in
check. The core PDS process should be
based on advanced technology.
Distribution of smart ration cards instead
of the usual ones across big and small
cities both, across the nation. These smart
cards would help in collecting all the
information on a single server, helping the
leakages to reduce by atleast 5%. A focus
on integrating operations of rice mills to
the state warehouses should also be
stressed upon. GPS can be used to monitor
the movement of food grains, so as to keep
a check on and eventually eradicate theft
of food grains. A proper supply chain
management of TPDS commodities from
the Food Corporation Of India to the fair
price shops should be a transparent
process. Under the UPA regime, rice was
given at Rs.3 per kg and this scheme
covered only 57% of this population. The
NDA Government should aim at covering
atleast 80% of the population, like it has
been observed in all BJP and allied parties
governed states.

The basic motive of a tax reform would be

to address the problems of the current
taxation system. A tax system that is
economically efficient and neutral in its
application, simple to administer is the
need of the hour. Sectoral and
distributional concerns have been at the
heart of the excessive differentiation of the
Indian taxation system- the results of
which are negated by the cascading effects
of the taxes. It is of utmost importance for

uniformity in the taxation system and this

can be achieved only by a combination of
taxes and transfers. To attain this neutrality
and uniformity, we can explore the three
options of the idea of the GST to be levied
by the current Government; namely,
Concurrent Dual GST, National GST and
State GST. Under the Concurrent Dual
GST model, taxes would be levied by
both, the State and the Centre. This model
is favoured by both, the Centre as well as
the Empowered Committee. Here, the
Central GST would apply to both G&S,
extending to the entirety of the supply
chain, including both, wholesale and retail
trade, whereas the State GST would
largely be confined to goods only. This
model is on the same lines as the model
recommended by the Kelkar Committee in
2002. Under the National GST model, the
taxes would be combined as only a single
source of tax as the National GST with
appropriate revenue sharing agreements
between the State and the Centre.
Countries like Canada, Austria, Germany,
and China have had this policy in place
since time immemorial. However it would
be very difficult to remove the
apprehensions of the states regarding

losing their control over taxes. Yet the

necessary needs to be done to streamline
the process of collection and utilization of
taxes. The GST amendment is crucial for
the new indirect tax regime as not only
will it allow the Centre to tax a product
beyond the service gate, but also provide
the states, the power tax services.

The initial reforms, policies are just the tip

of the iceberg. The budget 2014-15
showed how serious the Government is
about putting India right back on the track
of the economic growth that it needs and
very well deserves. The visionary reforms
announced regarding defence, women
education and empowerment, housing
schemes, FDI, PPP are worth a pat on the
back.
Narendra Modi-led NDA Government
does not hold a magic wand so as to turn
India into a utopian India overnight.
The ink on the nail of your fingertip from
voting, is still visible; your nail doesnt
grow that fast and you expect development
to happen that fast? Look around you.
Pause. Reflect. Achhe din aa gaye hai.