Union finance minister Arun Jaitley is set to unveil the Narendra Modi government’s first full budget this week. The initial let-down after the first budget of the NDA government had more to do with unrealistic expectations than with any disinclination to reform the economy. Nine months into office, however, there are more than audible murmurs that the Modi government’s tenure so far has been characterised by the lack of any striking changes. Deepak Parekh, an eminent banker and chairman of financial services giant HDFC, has said that impatience has begun creeping in among businessmen as nothing has changed on the ground and there has been little improvement on the ‘ease of doing business’ front. Mr Jaitley countered this by arguing that the string of initiatives only demonstrates the administration’s intent on reforms, to the extent that some say the government is acting too fast.
Expectation is riding high on the budget to detail the roadmap on how the government plans to deliver on some of its poll promises, soothe the frayed nerves of investors and deal with the growing aspirations of a restive young population. Of the three challenges confronting Mr Jaitley — regaining 9% GDP growth, making development inclusive and enabling investment — much more can reasonably be expected to be done in the forthcoming budget. The feeling of impatience of people like Mr Parekh and his peers emanates from the belief that the government has had the time to gear up to manage expectations. The intent has been declared, the machinery should now get rolling. Mr Jaitley has consistently maintained that reforms do not honour the fiscal calendar; if a majority of programmes and policies that the government has announced do get converted into actionable points, the economy would have shed some of its most trenchant rigidities.
In an atmosphere dominated by many known and unknown unknowns, ushering in the promised ‘Good Days’ is more complex than catchy alliterations. That’s because in many instances it would mean winding the way through a legal labyrinth before it gets delivered. Foreign investors once again have shown the penchant to chase the India story. Managing these expectations and hand-holding transition for a country that has multiple objectives to achieve is critical to reach the next level of equilibrium that has remained elusive over the last few years. Oil prices are at a five-year low, the currency is stable, inflation is at multi-year lows and there is a general buzz about the prospects of Asia’s third-largest economy. A large number of boxes still remain to be ticked in the unfinished reforms task sheet. It is just the right time to seize the moment to settle these for good, to remove constraints to growth and create job and income opportunities.