The most wanted reforms for India

Dump the communists...they have wasted so many opportunities for India

NEW DELHI: Please dump the Common Minimum Programme and opt for radical reforms if you want India to grow at 9% in the Eleventh Plan. This is implied rather than openly stated by the pre-budget Economic Survey.

The Left Front will be outraged. The survey lists the reforms as options rather than recommendations. But its underlying message is that India needs a new government after the 2009 elections that does not depend on the Left Front.

The key reform options are:

• Privatise old coal mines to enhance coal recovery, and allow the private sector free entry into new mines. Similarly, sell old oilfields to private companies for enhanced recovery.
• Decontrol sugar, fertilizer and pharmaceutical segments.
• Allow 100 FDI in greenfield rural-agricultural banks.
• Allow 51% FDI in rural insurance covering health, weather and such insurance. Allow 49% FDI in all other insurance.
• Amend the Factories Act to extend the workweek from 48 hours to 60, and increase the daily working hours limit to 12 hours, to facilitate peak use of labour in seasonal industries.
• Enact a new bankruptcy law to enable quick exit or management change of sick enterprises.
• Introduce multi-application smart cards to empower recipients of a wide range of government schemes from employment to public distribution system and public housing. Recipients can receive remittances directly into their bank accounts via smart cards, with no leakages or corruption.
• Freely allow the entry of A-grade foreign universities, and encourage B- and C-grade foreign universities, subject to tighter regulation. Allow private certification of skill development, besides government certification.
• Allow foreign equity in all retail trade, and 100% FDI in branded specialty chains.
• Permit corporate investment in nuclear power. This, in turn, means going ahead with the 123 nuclear agreement with the US.
• Make open access in electricity a reality through credible cross subsidies and free permission of distributors to connect by wire to government electricity pillars.
• Allow free entry of private and joint venture freight companies into new freight corridors being built by Railways.

The survey hints no more than tangentially at the possible shape of the coming budget. It highlights the need to step up spending in infrastructure and skill development. That may well be a key theme of spending priorities in the budget on Friday. The survey suggests that Fiscal Responsibility and Budget Management Act targets will be met.