<p>If the Congress-led United Progressive Alliance had banked only on “aam aadmi” programmes to return to power at the Centre in 2009 Lok Sabha elections, it has now desperately embarked on an inclusive mission to return to power for the third successive time, however dim the prospects may be.<br /><br /></p>.<p>As much as it lays stress on pro-poor schemes in the run-up to 2014 polls, the Congress is courting the corporates too. No matter if the elections are merely months away, the government is as though in a mad rush to push through long-due economic reforms and policy initiatives, obviously eyeing electoral gains.<br /><br /> The reforms offensive is aimed at combating an economy that is in the doldrums with the growth rate as high as 9.3 per cent in 2010 steadily on the decline and now cruising at just above four per cent. The rupee is on a steep descent, foreign investment flow is dismal, current account deficit is on the rise, inflation is getting worse, stock market situation is nothing to boast about and, on account of all these, investor confidence is at an all-time low. Besides, the government was hemmed in by adamant allies and hamstrung by the fallout of a chain of corruption scandals.<br /><br />Still, the government in the recent months rolled out industry-friendly schemes. Call it a sign of desperation, that these policy rollouts may not bear fruit in the short run and that a new government would be better placed to carry forward on economic reforms, or the UPA-II is in a hurry to implement them. The rush may appear a wild gamble but a government teetering on the brink of another election has nothing to lose. Only everything to gain, if at all it works.<br /><br />The recent months saw a flurry of activity, a stark contrast to a year ago when Opposition parties, analysts and et al lost no opportunity to take a dig at the non-working Union government and deride a “silent and weak” prime minister Manmohan Singh. “Policy paralysis” became a pet phrase of the critics. Many had asked this question: will a minority government on `daily wages,’ be able to take and stand by difficult decisions?<br /><br /> Putting that phase behind, the government, through a combination of executive orders, cabinet decisions, Parliamentary approvals and so on, has been making a last-ditch effort to get back into the reckoning. If the UPA was prevaricating for months and years, it is no longer doing so now. The decisions are targeted at every segment of voters in the name of inclusive growth. The avowed reason may be to halt the economic slowdown, attract investment and, thereby, reverse the rupee’s slide. But the unstated agenda is obviously to pacify the middle class and large business houses alike.<br /><br />Grand welcome <br /><br />The decisions of August 1 last may not be reforms blitzkrieg but the cabinet put its stamp of approval on a slew of proposals, hoping to boost a sagging economy and bait overseas investors. The decision to allow 100 per cent foreign direct investment (FDI) in the telecom sector met a key demand of the fund-starved sector which had been seeking FDI inflows.<br /><br /> Through this, the Union cabinet decided to raise the FDI cap from the earlier 74 per cent, even overruling security concerns expressed by the home ministry. Telecom minister Kapil Sibal dismissed such fears saying, “whether a foreign telco has 74 per cent stake, as was allowed, or 100 per cent, it does not alter the security issue.” The government hopes that foreign firms will bring in funds to the tune of Rs 5-6 lakh crore in the next five years, which the sector needs.<br /><br />The same day, the cabinet eased norms for FDI in multi-brand retail, a controversial decision taken last year. Unlike the earlier policy, the biggies like WalMart need not open stores only in 53 cities with one million population. They can penetrate smaller markets too. Easing norms, the government diluted the mandatory 30 per cent local sourcing of goods for these retailers while noting that new guidelines will bring in “more clarity and more space for investors”. <br /><br />The government also liberalised rules for overseas companies looking to invest in manufacture of defence goods. Investment norms for various other sectors too were eased.<br /><br />The more recent Companies’ Bill passed by Parliament aimed at transparency and fewer regulations; the cabinet nod for 49 per cent FDI in insurance and 26 per cent in pension funds aimed at attracting foreign investors and making these two sectors dynamic. The government is talking to other parties to push the Land Acquisition Bill to provide for rehabilitation and resettlement of people displaced due to acquisition; the goods and services tax, a value added tax which will replace indirect taxes, has been accepted by the Parliamentary standing committee on finance; the direct taxes code, to replace the Income Tax Act, is set to be placed before Parliament; while the cabinet recently approved a proposal on coal regulator aimed at infusing transparency in pricing and efficiency in coal mining operations. The government is also expected to give a push to the following pending Bills in Parliament: The Real Estate (Regulation and Development) Bill which seeks to establish the Real Estate Regulatory Authority, the Forward Contracts (Regulation) Amendment Bill, the Civil Aviation Authority Bill, Drugs and Cosmetics (Amendment) Bill.<br /><br />Classic act<br /><br />It is not just reforms that the government is looking at; the policies are carefully crafted to be inclusive, ensuring that the fruits of these programmes reach the common man. Like the rural job scheme which many believe brought back the Congress-led coalition to power in 2009, the food security programme, the government hopes, may be its gateway to gaddi in 2014. Another move to win over the electorate is the “direct (cash) benefit transfer” programme through which the government also seeks to balance economic reforms.<br /><br />The Centre would not have otherwise considered many of these decisions if not making a desperate bid. The Congress managers know very well that unless the party gives an aggressive push – be it for inclusive social and economic programmes or hard market-driven decisions – it may not please the common man, the all-important middle class (especially the hyper sensitive urban middle class) or industry. <br /><br />Besides, the fruits may not be there to see. Still, it is a gamble; whether the actions click or not, there is nothing to lose. Instead of going down meekly, the party appears keen to use every available opportunity to battle it out. If it succeeds, it will be a situation of winner taking it all. If it fails, there will be at least satisfaction that it tried its bit. What is on display now is a classic example of the century-old party’s survival instinct.<br /><br />Related Story<br /><br /><a>"India is prospering but Indians are not"</a></p>
<p>If the Congress-led United Progressive Alliance had banked only on “aam aadmi” programmes to return to power at the Centre in 2009 Lok Sabha elections, it has now desperately embarked on an inclusive mission to return to power for the third successive time, however dim the prospects may be.<br /><br /></p>.<p>As much as it lays stress on pro-poor schemes in the run-up to 2014 polls, the Congress is courting the corporates too. No matter if the elections are merely months away, the government is as though in a mad rush to push through long-due economic reforms and policy initiatives, obviously eyeing electoral gains.<br /><br /> The reforms offensive is aimed at combating an economy that is in the doldrums with the growth rate as high as 9.3 per cent in 2010 steadily on the decline and now cruising at just above four per cent. The rupee is on a steep descent, foreign investment flow is dismal, current account deficit is on the rise, inflation is getting worse, stock market situation is nothing to boast about and, on account of all these, investor confidence is at an all-time low. Besides, the government was hemmed in by adamant allies and hamstrung by the fallout of a chain of corruption scandals.<br /><br />Still, the government in the recent months rolled out industry-friendly schemes. Call it a sign of desperation, that these policy rollouts may not bear fruit in the short run and that a new government would be better placed to carry forward on economic reforms, or the UPA-II is in a hurry to implement them. The rush may appear a wild gamble but a government teetering on the brink of another election has nothing to lose. Only everything to gain, if at all it works.<br /><br />The recent months saw a flurry of activity, a stark contrast to a year ago when Opposition parties, analysts and et al lost no opportunity to take a dig at the non-working Union government and deride a “silent and weak” prime minister Manmohan Singh. “Policy paralysis” became a pet phrase of the critics. Many had asked this question: will a minority government on `daily wages,’ be able to take and stand by difficult decisions?<br /><br /> Putting that phase behind, the government, through a combination of executive orders, cabinet decisions, Parliamentary approvals and so on, has been making a last-ditch effort to get back into the reckoning. If the UPA was prevaricating for months and years, it is no longer doing so now. The decisions are targeted at every segment of voters in the name of inclusive growth. The avowed reason may be to halt the economic slowdown, attract investment and, thereby, reverse the rupee’s slide. But the unstated agenda is obviously to pacify the middle class and large business houses alike.<br /><br />Grand welcome <br /><br />The decisions of August 1 last may not be reforms blitzkrieg but the cabinet put its stamp of approval on a slew of proposals, hoping to boost a sagging economy and bait overseas investors. The decision to allow 100 per cent foreign direct investment (FDI) in the telecom sector met a key demand of the fund-starved sector which had been seeking FDI inflows.<br /><br /> Through this, the Union cabinet decided to raise the FDI cap from the earlier 74 per cent, even overruling security concerns expressed by the home ministry. Telecom minister Kapil Sibal dismissed such fears saying, “whether a foreign telco has 74 per cent stake, as was allowed, or 100 per cent, it does not alter the security issue.” The government hopes that foreign firms will bring in funds to the tune of Rs 5-6 lakh crore in the next five years, which the sector needs.<br /><br />The same day, the cabinet eased norms for FDI in multi-brand retail, a controversial decision taken last year. Unlike the earlier policy, the biggies like WalMart need not open stores only in 53 cities with one million population. They can penetrate smaller markets too. Easing norms, the government diluted the mandatory 30 per cent local sourcing of goods for these retailers while noting that new guidelines will bring in “more clarity and more space for investors”. <br /><br />The government also liberalised rules for overseas companies looking to invest in manufacture of defence goods. Investment norms for various other sectors too were eased.<br /><br />The more recent Companies’ Bill passed by Parliament aimed at transparency and fewer regulations; the cabinet nod for 49 per cent FDI in insurance and 26 per cent in pension funds aimed at attracting foreign investors and making these two sectors dynamic. The government is talking to other parties to push the Land Acquisition Bill to provide for rehabilitation and resettlement of people displaced due to acquisition; the goods and services tax, a value added tax which will replace indirect taxes, has been accepted by the Parliamentary standing committee on finance; the direct taxes code, to replace the Income Tax Act, is set to be placed before Parliament; while the cabinet recently approved a proposal on coal regulator aimed at infusing transparency in pricing and efficiency in coal mining operations. The government is also expected to give a push to the following pending Bills in Parliament: The Real Estate (Regulation and Development) Bill which seeks to establish the Real Estate Regulatory Authority, the Forward Contracts (Regulation) Amendment Bill, the Civil Aviation Authority Bill, Drugs and Cosmetics (Amendment) Bill.<br /><br />Classic act<br /><br />It is not just reforms that the government is looking at; the policies are carefully crafted to be inclusive, ensuring that the fruits of these programmes reach the common man. Like the rural job scheme which many believe brought back the Congress-led coalition to power in 2009, the food security programme, the government hopes, may be its gateway to gaddi in 2014. Another move to win over the electorate is the “direct (cash) benefit transfer” programme through which the government also seeks to balance economic reforms.<br /><br />The Centre would not have otherwise considered many of these decisions if not making a desperate bid. The Congress managers know very well that unless the party gives an aggressive push – be it for inclusive social and economic programmes or hard market-driven decisions – it may not please the common man, the all-important middle class (especially the hyper sensitive urban middle class) or industry. <br /><br />Besides, the fruits may not be there to see. Still, it is a gamble; whether the actions click or not, there is nothing to lose. Instead of going down meekly, the party appears keen to use every available opportunity to battle it out. If it succeeds, it will be a situation of winner taking it all. If it fails, there will be at least satisfaction that it tried its bit. What is on display now is a classic example of the century-old party’s survival instinct.<br /><br />Related Story<br /><br /><a>"India is prospering but Indians are not"</a></p>