The untimely death of Union rural development minister Gopinath Munde is setback to the new government and to the nation as he was one of its promising politicians. Besides praying God to grant his family and friends solace, it is hoped that this tragedy would open the eyes of the nation to the huge loss suffered because of road accidents. We need to take necessary steps to keep the frequency and scale of road accidents to the minimum. Coming to the monetary policy review, though RBI has not cut key rates for now, it did extend a friendly hand to the industry by reducing SLR by 50 bps. This eases up banks liquidity. It is up to the government to keep its promises on growth revival and inflation control.
Lessons for the BJP
The new PM has done away with an old administrative tool,the GoMs. This is no anathema. Sure, Vajpayee ran a 24-party coalition and the Groups of Ministers was an active system for handling divergence of views. But he could have with fewer such groups. In the UPA regime, GoMs became less of an exception and more of a rule. UPA-I had done well with far less GoMs than the UPA-II that met a sad end. GoMs, meant purely for administrative expedition, wasted time over policy differences that ought to have settled in the first place by the Congress/the UPA collective. That the Congress party, at crucial junctures, left the PM all by himself to tackle ministers from other parties of the alliance and this compounded the folly. Modis PMO-driven governance would need to be insulated from intra-party and intra-alliance political squabbles to provide him ample elbow-room for administering the affairs of the nation. State elections down the line may not be too dependent on Modi factor and internal party differences that had been the bane of BJP may recur. However, BJP must learn its lessons well. Its posts of its party president and convenor of the NDA must be given to separate individuals so as both responsibilities are dispensed with sincerity. Furthermore, the other elements of the Sangh Parivar have as much a role in the success of the Modi government as do Modi and his ministers.
The status quo in the key policy rates is on expected lines. There is good news in terms of political stability and with improved market sentiments the conditions are turning conducive for growth. Inflation is still a concern. Full budget for FY15 is round the corner. It would therefore be prudent for RBI to wait for the budget to be announced before announcing changes, if any, in the subsequent monetary review.
Srinivasan Umashankar, Nagpur