The new government will have no time to waste on coming to power. It is inheriting an economy facing inflationary recession, riddled with corruption, poverty and mass deprivation, besides anger and frustration. The reforms and economic solutions required are far from populist and hence difficult to carry out close to next elections. The only time to get cracking is right after elections without any thanks-giving gimmicks. In late 1990s, India had got into a recession after RBI?s tight credit policy and the Vajpayee government got us out by launching the Golden Quadrilateral highways project. Today, RBI?s monetary tightening, among other things, has got Indian economy into recession and the way out could be another ?quadrilateral? with its four interconnected ends represented by: subsidy and revenue deficit reduction; agro-rural focus; second generation reforms; and governance issues. ?Continuity? is the last thing India wants and management students would do well to comprehend this for better decision-making in anticipation of major changes.

Subsidies, much like reservations, are never a permanent or even long-term solution to the problem of poverty and deprivation. Both are only interim solutions to buy the government some time to lift the beneficiaries to levels where they won?t need subsidies and reservations any longer! As an economy develops, the changing socio-cultural milieu compels people to ask for work rather than doles. Both subsidies and reservations are harmful to the beneficiary because they render him complacent with no need to enhance performance. They distort the market mechanism to the disadvantage of the honest and meritorious. Subsidies put an enormous burden on the exchequer and reservations, on the overall efficiency. A major chunk of the revenue expenditure in the Union Budget is on subsidies, thus leading to an ever-widening revenue deficit, debt and interest burden ultimately driving the economy into a debt trap. Subsidies also have an inflationary impact. Rather, if the same money is used to create ample education and skill development opportunities, this will get people jobs and generate more tax revenue in the future.

Given the vast divide between the amenities available in rural and urban areas, it is of paramount importance to generate economic and social infrastructure in rural areas so that the rural youth won?t need to migrate to cities for self-development and good jobs. Agriculture must be made profitable by providing not only irrigation canals, roads, market and storage but also timely finances, high-quality inputs and technology diffusion. As per Abdul Kalam?s PURA model, if agriculture becomes profitable and stay in villages comfortable and pleasant, the rural exodus can turn into reverse migration restoring some tranquillity back to the bursting cities. On the contrary, providing ever more sophisticated costly infrastructure in cities will further pull in more people from villages. Same funds can be used to develop rural areas instead.

Frustrated with the long period of policy paralysis, Indian voters are really looking forward to drastic changes in certain policies and procedures. After the successful 1991 reforms, second generation reforms are overdue in the fields of education, agriculture, infrastructure, finance, labour laws and indeed many other sectors. To get employment generation happening, it is necessary to revive the nose-diving investment cycle which is impossible without radical reforms in procedures. Single-window clearances and fast-tracking approval of projects with job-creating capacity are urgently required not only for FDI, but also for domestic producers whose animal spirits are dampened by the several rate hikes and governance problems.

The extent to which people are disgusted with corruption was evident in the AAP victory in Delhi. Corruption has got embedded into Indian system at almost every level and if officials fear anti-corruption action, they don?t move files and force people to prefer bribing rather than getting their files stuck. If the new government makes a determined effort to remove corruption while also making files move within decent time limits, they will automatically take the air out of anti-corruption parties? balloons. RTI, Lokpal would help. If the governance issues get sorted out quickly, some industrial and agricultural supplies will get augmented and inflation will be curtailed automatically. The compulsory CSR is an excellent idea whereby industries would prefer to spend the amount on creating assets like schools and hospitals for the poor rather than giving away doles. Thus the new quadrilateral promises to undo many ills, some chronic, some temporary, that the Indian economy is faced with. If only the new ruling politicians can get over their feeling of insecurity and greed, they would end up doing something for themselves and the nation that will go down in history.

History says that when people get frustrated with the Congress, they elect other parties, only to get disillusioned, and re-elect the Congress in the next elections. If the present non-Congress would-be?s don?t want to face such a situation in 2019, they will have to plan a roadmap right now. First three years after election, get cracking on the politically tough measures and reforms that will hurt many, but never mind, voters won?t remember. At the end of first three years if the new government can reduce subsidies and eliminate revenue deficit, they will be free to use the finances for voter appeasement in the last two years, just before 2019 election. By that time, they would have already put India on a decent developmental path with good economics. And who says good economics is always bad politics?

The author is faculty of economics in SIMS, Symbiosis International University, Pune, and can be contacted at shubhada.s@sims.edu