The Congress led coalition government has returned to power
in India after the successful conclusion of the world's largest
With the chief architect of Indian economic reforms, Prime
Minister Manmohan Singh back in the driving seat, everyone from
business barons and CEO's to traders and investors have their
wish lists ready. The equity markets already gave a euphoric
welcome to the Congress government by soaring to a record single
day gain on the announcement of the election results.
On a more conservative note, once the initial euphoria tapers
off the government will have to get to the grind and deliver.
Unfinished projects - work which could not be completed due to the
compulsions and compromises of coalition politics - now ranks high
on the to do list! Reforms in politically sensitive sectors such as
insurance, banking, pension, labour laws and agriculture are
expected to be the frontrunners on the new government's
On the parliamentary front important legislation such as the
Insurance Amendment Bill, the Banking Regulation Amendment Bill,
the Forward Contract Regulation Amendment Bill, the new Companies
Bill that have all been long pending shall hopefully now see the
light of day. It will be expected that these pending Bills and
other laws that deal with important issues are addressed in a way
as to create robust regulatory frameworks.
Regulatory uncertainty, policy impasse and ambiguity in several
sectors need to be addressed as a priority and over ridden in no
uncertain terms. Other pending items include, finalisation of the
framework for goods and services tax, reforms in direct tax laws
and an enabling framework for data protection under the amended
information technology laws. In the telecom sector the government
will have to restart the auction process for issuing "third
generation" or 3G licenses and also address disputes relating
to spectrum allocation. Decisive action will be necessary towards
speedier implementation of infrastructure projects. Investors shall
be closely looking at regulators like the Competition Commission of
India that became operational recently and require the necessary
support and guidance from the government to function
Clear majority may come as a sigh of relief but the adverse
global economic climate and the impact of the slowdown on the
Indian economy will make the start of the new innings for the
government more challenging. It was Dr Manmohan Singh who led the
historic reforms in the year 1991. Almost two decades hence when
the promising Indian economy is ready for another leap forward,
will the Prime Minister and his team be able to deliver? Will the
much awaited "second generation reforms" become a
reality? As of now the signals emerging from New Delhi look
positive; for the performance of the government however, the jury,
as they say, is still out.
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