The government must snatch the opportunity thrown up in the Lefts diluted stance on disinvestment, to engage its leaders more meaningfully in other policy issues as well. In the winter session itself, several crucial economic bills, including some sticky ones requiring amendments to the Banking Regulation Act and Pension Fund Regulatory and Development Authority Bill, are scheduled to be tabled. The Left parties have serious ideological differences in the provisions of both the Bills.
While keeping the Left parties engaged in policy-making ensures that the government will not be pushed to brinkmanship, it is also required of the Prime Minister to take a strong position on pending reforms. One such area is the financial sector. The Budget promise of hiking FDI in insurance to 49% needs to be implemented. Also, with banks required to conform to Basel II norms by April 2007, there is a strong need to beef up the capital of public sector banks. Despite the much-talked about consolidation, there has been little movement till date. While the finance minister has left it to banks to take the initiative, action on the merger and acquisition front is unlikely till the ministry involves itself proactively.