The 275-256 margin by which the UPA government won the trust vote in Parliament on Tuesday is expected to help the Manmohan Singh government emerge stronger in its bid to push through select economic reforms that do not require legislative clearance.
The broad consensus now emerging in Mumbai, the country?s financial capital, after the government won the all-important trust vote after a day of high drama, is that the Singh government will now be able to try and push through some reforms through executive fiat.
Business circles have not missed Singh?s new, confident body language all through Monday and Tuesday?the thumbs-up and victory signs, the confident smile and determined walk into the portals of Parliament House. The signals the business community are taking are that a confident Prime Minister, rid now of the fetters imposed on him by the Left parties, may be able to push through some important pending reforms.
Says UK Sinha, chairman of UTI Mutual Fund, which is owned by four state-run financial institutions and is expected to make an IPO in the near future: ?I expect the government to now push through economic reforms, which it could not undertake for the past four years owing to political compulsions.?
Those like industrialist Sanjiv Goenka and IndusInd Bank chief Romesh Sobti also expect a boost to the government?s economic agenda, now that the uncertainty hanging over the government has gone. The business community?s expectations on accelerated reform from the government could also be gauged from that age-old barometer, the stock markets, which were buoyant through Tuesday, despite the tension in political circles over the outcome of the trust vote.
The Sensex ended the day well over the 14,000-mark, gaining a substantial 254 points, a clear signal it expected the government to continue and, therefore, reform to get a booster dose. The business community expects the government to sell small stakes in PSUs that do not require Parliamentary approval, in order to reduce the burden on the fisc.
However, despite the bullishness in business circles over the outcome of the trust vote, privately a number of business leaders also say that while executive powers exercised by the government will be able to push through some reforms, those requiring Parliamentary approval may still pose a challenge.
Few in the business community are, for instance, betting on major reform in banking, insurance and pensions, since that would require going to Parliament, and clearing that hurdle may still be a tough ask for the UPA government, with the smarting Left and BJP still baying for blood.
?There can be more reform in civil aviation, telecom and even in retail. But the big ones may be tough,? says a CEO, requesting anonymity. ?The government may tease the Left a bit, but pushing the big reforms through won?t be easy even now.?