PM Modi on economic reforms: ‘No lack of political will, perhaps there is extra’
Prime Minister Narendra Modi addressed bureaucrats at programme to mark the 11th Civil Service Day at the Vigyan Bhavan.india Updated: Apr 21, 2017 22:28 IST
Prime Minister Narendra Modi said on Friday his government does not lack political will to push economic reforms, signalling the possibility of a fresh round of business-friendly measures after winning a string of emboldening election victories.
The Modi government has cleared several reforms legislation over the past two years. It scrapped about 1,200 outdated laws, pushed through a Goods and Services Tax, wrote a new bankruptcy code, sold shares in state-run firms and opened up the market to more foreign investment.
But Modi has largely stayed away from politically difficult reforms such as overhauling laws governing land acquisition and labour. Analysts say his party’s victories in four of five state elections last month should give the government confidence to take a shot at reforming these sectors.
“Political will is required for reforms. I don’t have any problem with that. Perhaps we have extra political will,” Modi told a gathering of bureaucrats at the Civil Service Day celebrations.
He said while political will was important for reforms, the government could perform only through an efficient bureaucracy.
“Reforms in the areas of land, labour, corporate bond market and NPA resolution will revive investor sentiment and encourage private investment.
“We are talking about reform, transform perform. Political will is needed for reform but performance depends on your action and strength. And if there is people’s participation, then only transformation is possible,” he said.
Although armed with a fresh mandate as a champion of the cosmo-urban middleclass and the poor, Modi still faces a challenge in implementing reforms, especially because the opposition can stall his plans in the Rajya Sabha where he lacks a majority.
The reforms investors expect the government to push include allowing banks to raise money from the market, setting a ‘bad bank’ to tackle the problem of non-performing assets (NPA) of state-backed lenders and overhauling wages and industrial relations laws.
“Reforms in the areas of land, labour, corporate bond market and NPA resolution will revive investor sentiment and encourage private investment,” said Aditi Nayar, principal economist at ICRA, a unit of ratings agency Moody’s.
In his pep-talk to bureaucrats, Modi also asked them to change their mind-set from that of a regulator to an enabler.
“Things have changed vastly in the last 15-20 years. Earlier, the government was everything…. But now they have an alternative,” Modi said, citing private healthcare and airlines which are more preferred by people than state services.
Backing the bureaucracy that often delayed decisions owing to fear of scrutiny by the national auditors, CAG, Modi said there was nothing wrong in faster decisions if they were taken in the nation’s interest.
“Our plans should be outcome-centric, not based on output. Output may be okay with the CAG. But if we look at CAG-centred output, then we can’t change the nation. If someone takes quick decisions then it is not necessary that he has evil intentions,” he said.
“If you are working with honesty for people then no one can blame you. I will stand beside you.”