The phase between elections and government formation is generally a null and dull period for the Indian economy. Although the level of activities at various sectors is low, the expectations for better days is likely to be unfolding in the next few days.
The market has shown abundant enthusiasm (the highest upward moving in Asia) and the FII inflows are on the rise.
The FE reserve at $315 billion is healthy. Globally, along with US, the European market led by Germany is showing signs of green shoots reflected in the rise of all leading indicators.
Against this gradual shining of global and national environment, it is customary that each business segment prepares its multiple focused agenda and places them before the new government for consideration.
Although in most of these cases, minor issues involving fiscal, monetary and trade facilitation ought to be taken up only in the annual budgetary exercise predominate, broad economic factors such as investment, inflation, growth, taxation, subsidies, infrastructure and logistics also find mention.
It has to be appreciated that the primary task of the government is to initiate simple and pragmatic policies and measures that would plug loopholes of many of the ongoing steps so that the benefits envisaged at the time of introduction of these laudable policies are achieved for the target population.
These include single-window clearance for most of the stalled projects worth of nearly Rs 3, 400 billion and simplifying the PPP mode of investment in all projects specifically in the roadways, DFC and industrial corridors to attract private investment.
It is very pertinent that a developing economy has to earmark substantial funds for investment for building infrastructure and food for work programmes must not be allowed to go waste without creating tangible assets in the semi urban and rural areas.
If the massive waste taking place year after year in the food stocks lying in FCI godowns (food grains that have been purchased by paying ever increasing MSP) can be brought down by making prudent mix of procurement, distribution and logistics management, it would make a big dent in the overall food subsidies and make more funds available for infrastructure investment.
It would also put an end to the bogey of periodic supply shortages leading to sharp rise in food prices and thus make inflation targeting by RBI more focused and effective without sacrificing the imperatives for economic growth.
The current battle between inflation targeting and growth imperatives would lose much of its sheen if this simple method of reining in food prices is pursued with proper planning and reorganization.
Secondly, all the roadblocks against FDI in the retail sector other than multi-brand retail remains to be fast eliminated as it would pave the way for much higher level of FDI in other sectors.
Thirdly, it is necessary to redefine the roles and responsibilities of the regulators and create a new set of them in sectors like power, coal, petroleum, natural gas and mining. This would immediately take care of the multifarious violations and system deficiencies and make a systemic improvement in doing business in India.
India is gradually moving up the ladder in terms of attractive destination for capital inflows.
The new government must send a positive signal to the outside world of its genuine intention of facilitating foreign investment. The feel good factor is to be nurtured by a positive tone and tenor of all policy prescriptions. The industry is eagerly waiting for seamless transportation of goods across all states with introduction of GST. A number of such wish-lists must be a reality in the coming months.
The author is DG, Institute of Steel Growth and Development. The views expressed are personal