SurferSpeak: My 10-point wishlist for PM

Our surfer postulates on what ought to be PM's priority vis-a-vis the economy.

To say that the Prime Minister of a country like India has only 10 tasks to perform to ensure good times keep rolling is a bit facetious.

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There's poverty, illiteracy, healthcare and any number of other such issues the government has to deal with.

But the process of wealth creation in an economy is often determined by sentiment: will things improve? Will more and more consumers be able to afford the goods and services being offered? Can businesses hope to operate profitably in the future?

Since 2006 has just begun, I've compiled a list of 10 things that Prime Minister Manmohan Singh needs to do to keep the morale of the investors and corporates up.

Here's a reverse countdown:

10) Resolve the spectrum issue in telecom.

A decision is needed to keep the sector booming and help bridge the urban-rural divide in terms of tele-density. PM has already set up a group of ministers to look into spectrum allocation to GSM and CDMA operators, but he needs to ensure that the decision is not just fair, but viable for the operators.

9) Ensure better implementation and monitoring of Bharat Nirman and National Rural Employment Guarantee Scheme (NREGS).

To put such important schemes at #9 might seem ironic but that's because the schemes seem too grand to be practical -- especially NREGS. Yet, if the government can do a good job of its Rs 1,74,000-crore Bharat Nirman project, it may not have to talk of rural unemployment, since the scheme is aimed at boosting rural infrastructure and, hence, the rural economy.

8) Ensure modernisation of metro airports in a speedy and transparent manner.

It's not just Delhi and Mumbai -- where the modernisation plan has run into all sorts of problems -- but Hyderabad, Bangalore, Chennai and Kolkata, whose airports need to be upgraded. There are just two key issues here: promptness and transparency.

7) Develop a regulatory mechanism for public-private sector participation in infrastructure.

For industry to become an active partner in India's infrastructure development in roads, ports, power and the airports sector, there is an urgent need to establish a robust and autonomous regulatory mechanism for these sectors. What would help is reviewing foreign direct investment (FDI) caps in this sector. Let's face it. We need FDI.

6) Pass on international oil price hikes to domestic users instead of making oil PSUs bear the burden.

Sure, such a move could impact inflation and possibly investment, but it is inevitable. Higher LPG and kerosene prices must be passed on to consumers, besides which the PM should consider applying vat (value-added tax) on petro-products to make their prices uniform across the states.

5) Reduce fiscal deficit.

The Central government's fiscal deficit is down to a benign 4.5 per cent compared to 5.6 per cent in 2000. But combined with the states, the deficit is a scary 10 per cent. That's making credit expensive for industry. The government has to reduce food and fertiliser subsidies, impose user charges on power and water in agriculture and downsize the government.

4) Create a truly all-India market for free movement of goods.

The controls and restrictions imposed by multiple authorities at various stages -- at the state-, district and municipal-level -- not only prevent rational and uniform pricing strategies for products, but are also the biggest roadblock in creating an all-India market. For PM, it will mean doing away with or amending a number of restrictive laws such as the Essential Commodities Act, 1955; Standard of Weights and Measures Act 1976, and the Agriculture Produce Marketing Act, among others.

3) Allow FDI in retail.

According to a PricewaterhouseCoopers study, FDI in retail can generate 8 million jobs in the next five years. Fears of foreign retailers killing mom-n-pop stores are exaggerated, besides which better supply chain management may actually end up helping millions of India's poor farmers get better prices for their products.

2) Amend the Contract Labour Act.

If India has to compete with China in manufacturing, it needs more flexibility to open and shut factories without having to worry about labour issues. "To begin with, the Prime Minister can relax the labour laws in the special economic zones," says Ajit Ranade, Chief Economist, Aditya Birla Group.

1) Get on with disinvestments.

Disinvesting in non-strategic, non-navratna public sector enterprises through the IPO route (even if strategic sale is ruled out for now) will not only help in deepening and widening the domestic capital market, but it will also release huge amounts of money that can be used for social as well infrastructure projects.

The views expressed are those of Prabhpreet Batra from Ludhiana. He can be contacted onppbatra86@hotmail.com.