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Duff and Phelps study sets out agenda for NDA govt

The Bharatiya Janata Party-led National Democratic Alliance needs to accord high priority to correct the present fiscal imbalance, according to the latest economy update of Duff and Phelps India Research and Information Services.

The report released in Bombay suggests that certain crucial decisions will have to be taken by the new government to ensure sustained economic growth as the government would have to raise resources to meet additional defence expenditure on account of Kargil conflict, increase in wages to central government employees, and increased procurement prices to farmers.

The new government would have to evolve a broad consensus among various political parties and firm up its stand on the WTO talks to be held at Seattle, the report suggests.

India would have to negotiate on concessions on intellectual property rights, agriculture and the services sector. The government would also have to spell out its stand on e-commerce, competition policy and industrial tariffs.

The report notes that the simple majority secured by the BJP-led NDA in the recent parliamentary election is likely to lend stability to the government at the Centre. A recent DCR-USA release observes that a stable coalition government would be able to focus more on correcting fiscal imbalances than on political maneuvering.

It further emphasises that the new government has come to power at a time of cyclical recovery in the Indian economy. However, greater restructuring is required if the recovery is to be sustained. The new government needs to take crucial decisions on fiscal prudence, public sector unit divestment, infrastructure sector reform, telecom policy and insurance bill.

The Duff and Phelps update also suggests to expedite the process of clearing the backlog of important legislation. The government will have to implement the new telecom policy, which has been a subject of controversy. Certain important bills needs to be introduced and passed.

The divestment and privatisation programme for public sector enterprises would have to be initiated and implemented to garner the budgeted Rs 100 million. Reforms in the infrastructure sector will have to be stepped up to catalyse growth of the economy and promote private capital injection in the infrastructure sub-sectors.

Measures to facilitate additional foreign direct investment flow in certain crucial areas would have to be initiated.

UNI

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