Finance Minister Arun Jaitley’s visit to the US that concluded on 24 June is likely to strengthen the NDA government’s resolve to push for reforms. The fractious politics of the country, however, may not give him or the government much elbow room since most reforms have to pass parliamentary scrutiny. The Monsoon Session of Parliament is to begin from 21 July; it will be a test of government’s determination to push reforms.
A faceoff with the opposition that can disrupt Parliament’s proceedings is not good, but the government may have few options due to the opposition’s demand for resignation of Foreign Minister Sushma Swaraj and Rajasthan Chief Minister Vasudhara Raje over their controversial links with disgraced former IPL commissioner Lalit Modi. The casualty is likely to be the economy and promises of confidence building measures to boost investors’ confidence.
Speaking to media in San Francisco, the finance minister said reforms had become absolutely necessary in three areas — land, labour and taxes. In deference to suggestions from the NRIs in Silicon Valley, he has also declared his intention to set up a permanent consultation mechanism to deal with issues of investors on a day-to-day basis.
But the finance minister would be falling awfully short of expectations if the government does not take steps to tackle corruption and bureaucratic delays. Jaitley spent seven days in the US during which he interacted with policy makers, think tanks, business bodies, professors and supporters of the BJP. In all he addressed 20 meetings. He described the visit as very productive and very educative. While he showcased India as an investment destination, he also listened to the problems of those who wish to invest.
In most meetings, he was asked what the country was doing to deal with corruption. While GST, land reforms and labour reforms were easy to talk about, the Indian minister could not present a definite road map to tackle corruption. He spoke about unleashing entrepreneurial energy, but did not elaborate how it would happen unless corruption was reined in. He spoke about structural reforms such as in public procurement, bankruptcy law, dispute resolution in context of public contracts and for easing business processes.
Such educative tours are needed for policy makers as it exposes them to fresh ideas and expectations from those the government is trying to lure to invest. This is definitely going to help the finance minister when he faces Parliament’s Monsoon Session that begins 21 July. It is true that India cannot develop without investments from abroad, particularly the NRIs who are happy because of the Overseas Citizenship Card this government has allowed, entitling them for lifetime visa, hassle-free travel without reporting to the police etc.
Such visits had helped Narendra Modi when he was the chief minister of Gujarat to rope in Gujarati NRIs to invest in the State. Not only did he create special windows for them, but he also rolled out a red carpet for them and persuaded bureaucrats to extend special hospitality such as not forcing them to wait for meetings. He had given the call reap in a rupee and invest a dollar.
Jaitley is taken as the second most important person in this government after Narendra Modi. Naturally people were keener to speak to him and know the approach of the government. They also spoke of high expectations and slow pace of reforms. Jailey acknowledged the expectations and the need to act faster.
He spoke of India as a great opportunity particularly as the rest of the world was slowing down. India stands as a good opportunity and a great investment destination “if we can continue the reform story and improve the ease of doing business”, he said. This “if” is the biggest question mark looming over the government. And the government will not gain anything by blaming the opposition. Smart manoeuvre of Parliament with some give and take is essential. The skills of Parliamentary Affairs Minister M Venkaiah Naidu and his deputy Prakash Javadekar is to be put to test.