Economic reforms through legislation have been stymied at an increasing rate in recent years due to opposition by vested interests. Narratives are spun on the many platforms available nowadays to influence public opinion. As these very likely impact voting choices, governments, particularly that of the BJP at the Centre, have become wary of disruptive issues acquiring disproportionate importance. The agitation against the farm laws, for instance, though confined to a small region, impacted on the future of farmers throughout the country when the reforms had to be withdrawn. Similar problems are being faced in changing labour and land acquisition regulations.
So, when bold action and dramatic transformation is being successfully countered, it would be wise to adopt the ‘nudge’ strategy, achieving objectives by establishing incentives and disincentives that lead in a certain direction. Organisations and representative bodies from various sectors are advising Union Finance Minister Nirmala Sitharaman to adopt this approach in the coming Union Budget. While the challenges facing her are plenty, not least the transforming global economy and its impact on India, she also has to cope with stubborn inflation, a poorly performing manufacturing sector, stagnant agricultural productivity, and the politicisation of almost everything. This means that plans and projects are opposed not on the basis of merit, but because of the desire not to give government credit for a good job done.
Quite obviously, those involved in the various sectors are most aware of the challenges and the requirements for the future. The Finance Ministry is presently involved in holding discussions with such groups and many suggestions have already been received. Hopefully, these will find place in the overarching strategy of the government, as that would bring substance to policy. The states, too, have a good idea of what is required for economic growth and a consensus has to be developed that provides them the necessary autonomy to take responsibility. Development will have to come despite politics – that is the message of the present day.
