Finance minister Arun Jaitley said on Friday India may have to overhaul its cooking gas pricing system with subsidies targeted only at the poor as he laid out the contours of the government's next round of reforms.
The government was readying a raft of measures in the coming weeks including higher foreign investment ceiling for insurance firms, steps to roll out a nationwide goods and services tax (GST) and legislating an ordinance on the allocation of coal blocks, he said.
"The mindset of polity has to change. The mindset of polity can't be 'well I have a Parliament session in a few days from now, how do I block reforms?' I can quite see some groups working overtime in that direction," he said at a session titled 'Making India a Superpower: Hope or Fantasy' at the 12th Hindustan Times Leadership Summit.
"The next important decision that India will have to take is who is entitled for LPG (liquefied petroleum gas) subsidy. A few people are but not everyone," he said.
"I believe we're a country of tremendous potential, which hasn't been harnessed properly."
The government had recently lifted state controls on diesel prices, allowing oil companies to fix pump-gate prices of the transport fuel. A decision of rationalising subsidies on LPG will likely be based on recommendations made by the Bimal
Jalan-headed Expenditure Reforms Commission (EMC).
"The EMC has had a recent meeting with me. They are coming out with a set of suggestions very soon on subsidies," the finance minister said.
With inflation plunging to multi-year lows, there are heightened expectations that the Reserve Bank of India (RBI) will cut lending rates in its monetary policy review early next month. "I have a lot of patience," Jaitley said cryptically on being asked whether he would be unhappy if the RBI doesn't cut rates.
"The RBI is a very responsible institution and it has served this country well. The responsibilities that have been assigned to it, it has been discharging," he said.
"I think this is one of the strengths of the Indian system that we are able to put across contrarian view points and do it publicly. The centrality of the central bank in deciding some issues, making its own judgements, can also be a subject matter of such a discussion," he said.
Taking a swipe at the previous government's version of the land acquisition law, Jaitley said: "New definition of reforms is to undo a lot of what the predecessor has done".
"I have no quarrel with the compensation process. But the procedural part of the land law is a big problem and it will require a lot of effort to simplify the procedures."
In an obvious reference to the UPA government's 2012 decision to impose taxes retrospectively on corporate deals that included Vodafone's acquisition of Hutch's assets in India in 2007, Jaitley said undoing a lot of taxation decisions was also challenging.
Analysts and investors will be keenly looking for forward-looking cues from Jaitley's statements at the HT Summit.
Over the last five months, the Narendra Modi-led government has unveiled a string of measures to turn India into a manufacturing powerhouse, remove bureaucratic sloth, make the country more investor-friendly and aid its economic recovery.
India's retail inflation fell to a three-year low of 5.52% in October and industrial output rebounded to 2.5% in September, rekindling hopes that cooling prices will nudge the RBI to cut lending rates leading to lower EMIs in its monetary policy next month.
Full coverage: HT Leadership Summit