Crucial reforms in the financial sector, including banking, insurance and pension, could take a backseat even after a new government takes over, due to the pressure of coalition politics. Though India Inc is hoping that the reform process would be accelerated after the election, an official source said that with a coalition government in place, uncertainty over the issue was likely to continue.
“A lot would depend on the coalition players and their individual interests. In all probabilities the reform process would slow down,” the source said.
Mahesh Purohit, director, Foundation for Public Economic and Policy Research told Hindustan Times that the focus should be to move ahead with the reform process and bring in more efficiency in the system. It would be a tall task for any government to carry out the reform process.
Trade unions in the banking sector, for example, have threatened to go on indefinite nationwide strikes in case “reforms” are introduced in PSU banks. “There is no need for any change. Any reform in the banking system will be answered with nationwide indefinite strikes,” said CH Venkatachalam, general secretary, All India Bank Employees Association.
The left parties have already underlined that several economies, including the US, have suffered due to the privatisation of the financial sector.