Policy paralysis: Cornered govt in damage control mode

With the UPA government coming under heavy criticism for the policy paralysis that has shackled the Indian economy, the Prime Minister's office has churned out a long laundry list of " achievements" under the title: " Reforms undertaken in 2012- 13 and 2013- 14, the economy and development".

The list aims to project the government's " achievements" and is expected to fuel the Congress Party's propaganda in the run up to the polls.

However, a close study of the list reveals that much of the so- called reforms effort has been confined merely to paper and there is little to show by way of actual implementation at the ground level.

Claims

The paper proudly claims that the country's FDI policy has been liberalised both for single brand and multi brand retail. However, the ground reality is that not a single dollar has flowed into the country by way of foreign investment and multinational companies are still grappling with the complexities of the new rules. The government has been forced issue several clarifications on the issue.

Investment revival by fast tracking big ticket investment projects in both the public and private sectors through the cabinet committee investment ( CCI) has been recorded as an another achievement. But the truth of the matter is that problems related to land acquisition, environmental clearances and financial closure from banks are still holding up most of these projects.

The PMO paper claims that subsidy reforms begin with reform of fuel subsidies and states "diesel prices being corrected gradually to market rate; bulk consumers to get diesel at market rate.'' However, the ground reality is that the government has not been able to push through this reform for fear of a political backlash as although diesel prices have been raised the subsidy is still huge at over Rs 13.50 per litre.

Besides, the subsidy on food and fertilisers has been almost doubled to win votes. Taxation reform has been listed as an achievement and includes the setting up of a tax administration reforms commission / as an achievement.

However, the government has been struggling to introducing the nationwide goods and services tax ( GST) which has virtually made no headway. Interestingly, the paper admits that in the case of GAAR meant to check tax evasion in foreign deals such as Vodafone, the roll out has been deferred by two years.

The paper also includes reforms in the coal sector as an achievement but the government has had to face a major embarrassment in the Coalgate scam .