As the Congress-led UPA government draws up its ambitious 100-days governance programme, captains of the industry, business strategists and policy makers are advocating a series of reforms to kickstart the domestic economy hit by the global financial crisis. They say that since the UPA has received the popular mandate, it would be prudent for the new government to pursue reforms vigorously, which it could not do in the last term. Corporate chiefs say business confidence is really upbeat now as a stable government at the Centre can certainly accelerate economic growth.

Infrastructure, power, education, health and labour reforms should top the agenda for the new government. Infosys chief mentor NR Narayana Murthy says the government would have to reduce bureaucratic controls to encourage entrepreneurs and corporations. ?They will have to make India an attractive destination for foreign direct investment and enhance liquidity in the market place so that banks can provide loans easily,? he underlines.

Rahul Bajaj, chairman, Bajaj Auto and member of Parliament, emphasises that the government should draw up a short-term and a long-term agenda to revive the economy. In the short term, he says, the government should drive down interest rates and increase credit availability. ?The government should increase spending on infrastructure by cutting down on non-merit subsidies and in the long-run the government should reform every sector of the economy to remove distortions and reduce bureaucratic discretion to encourage the enterprising and the honest,? he says.

Thought leaders say the government should encourage domestic companies to become more export intensive and strongly focus on foreign direct investment and less on foreign institutional investment. Leaders emphasise that agricultural growth should be sustained to give a fillip to the rural economy. Micro, small and medium enterprises, which play a leading role in employment generation and contribute significantly to the national economy, should get top priority.

N R Narayana Murthy : Chief Mentor, Infosys Technologies Ltd

Initiate education and labour reforms

I am happy that the UPA government has been re-voted to power. This will bring in stability. Also, the government will be free to pursue its policies because there will be no deterrents as in the past. The government would have to reduce bureaucratic controls to encourage entrepreneurs and corporations.

They will have to make India an attractive destination foreign direct investment and enhance liquidity in the market place so that banks can provide loans easily. The government should encourage Indian companies to become more export intensive because our exports have gone down. This can be done not through tax exemptions, but by supporting their advertising efforts or raising the brand of India by creating platforms where companies can learn to improve quality and increase productivity. The government should continue to focus on agriculture and make sure that the agriculture growth rates are sustained.

We need secondary reforms particularly in the area of labour flexibility. Companies must be free to hire and let go workers. However, to do this, they have to keep a good safety net by way of social security wherein those people who have lost their jobs would get full salary for may be nine months, 50% salary for the next nine months etc. That?s the first set of reforms that we need.

Secondly, we need reforms in the field of education particularly in primary and college education. It would be a good idea to give breakfast and dinner to poor kids in schools because unless their nutrition level is good, children will not be able to absorb anything taught in the class. The midday meal will not work because it is distributed at 1:30 in the afternoon which means children get it after three hours of studies are finished. When you are hungry and sitting in a class, how can you absorb anything?

We have to improve the delivery of healthcare services in our government hospitals. The services have gone down quite a lot. We have to bring in reforms in the retail sector because we need lots of supermarkets so that our poor people can get cheaper items of food and other basic consumer needs.

The government has started using IT in a big way. Several major IT projects can be launched to bring in efficiency in government departments. It has already started happening and we need to accelerate it now particularly in the area of e-governance because it enhances transparency, fairness and accountability. If we can bring in a set of reforms, it will reduce friction in business operations. Then I think most of our worries will be over and we would be able to fight it out in the market place and succeed.

Malvinder Mohan Singh : Chairman, Ranbaxy

Increase public spending to drive inclusive growth in the country

The result of the general election for 2009 is very good for the country and it will ensure that there is continuity and a stable government at the Centre. A stable government at the Centre will accelerate economic growth and ensure that the reform process continues. At this moment, it is very important for the government to increase public spending to drive inclusive growth in the country. The government should also have a strong focus on infrastructure development, healthcare and education, which are the key areas for development. The new government should immediately address the crisis of economic confidence in the country.

Arjun malhotra : CEO & Chairman, Headstrong

Rationalise the size of government

The new government should hasten the pace of liberalisation (the Left was holding them back earlier) and aggressively rationalise the size of government and the bureaucracy. They should have more inclusive policies especially for the economically backward and I hope they show political will in tackling corruption aggressively. The government should reform the bureaucracy and focus on anything that has an impact on the rural communities like mining and food processing. It must encourage and nurture public-private partnerships, particularly in healthcare and education. We need clear long-term policies and guidelines more than reforms so that we can get these services to more people in India as soon as possible. Business confidence after the elections should be high and companies would expect a budget where the government and industry can work together to meet the national objectives. This is a great time for the government to give up the ?we v/s them? attitude and look at working with the industry.

Rahul Bajaj : Chairman, Bajaj Auto

Cut down subsidies, hike infrastructure spending

The government should have a short-term and a long-term agenda in place to come out of the slowdown and revive the economy.

In the short-term, it should drive down interest rates and increase credit availability. The government should increase spending on infrastructure by cutting down on non-merit subsidies, which are serving little purpose, or reform policies and procedures, which are hindering such investment. It needs to implement the goods and services tax quickly and make it easier to adjust labour levels in the face of an uncertain demand. The government should appoint reform-minded, competent and energetic ministers.

In the long-term the government should reform every sector of the economy to remove distortions and reduce bureaucratic discretion to encourage the enterprising and the honest. The current system is generally more favourable to the dishonest. In every sector there is tremendous scope for improvement in effectiveness and efficiency.

It should invest in irrigation, water harvesting, agricultural research and roads to boost agricultural output. It should reform and improve provision of education and health services to the poor by moving to a system of vouchers for them.

Though every sector in the country needs reforms, some like labour, electricity pricing and distribution, and private sector participation in coal and in higher education can do by removing controls on entry, expansion, salaries and fee.

The verdict of the general elections would encourage investment because the fear of unwieldy coalitions, especially the pernicious influence of the Leftists, resulting in irrational policies is gone. Sensible reform and economic policies would generate growth and provide funds to the government to spend on physical and social infrastructure.

Jagdish N sheth : Management Guru

Agriculture, retail and telecom need reforms

For the Congress-led UPA government at the Centre, three initiatives will be the key to revive the economy. First, the government should strongly focus on foreign direct investment and focus less on foreign institutional investment, which are for short duration. Secondly, the new government should liberalise the domestic economy by more economic reforms and third, the government should announce a large stimulus package, especially focused on infrastructure, small and medium enterprise sector and rural development. These three initiatives should be taken at the earliest. They would enable India to achieve long-term growth.

The three sectors in the Indian economy, which would need reforms are retail, telecom and agriculture. Business confidence of companies will go up now because there is a stable government with a clear majority at the Centre. Most importantly, the waiting game is over and there is clarity about the economic policies of the country. For companies there are great assets that can be bought both in India and abroad. Therefore, we should expect more mergers and acquisitions. Foreign direct investment will grow especially from Asia and particularly from Japan, South Korea, Singapore and also from China, which would indeed be very encouraging for India.

Suresh Tendulkar : Ex-Chairman, PM?s Economic Advisory Council

Ensure flow of cheap credit to MSMEs

The elections have produced a clear mandate for political stability and economic prosperity with stable economic policies. The short-term agenda has to focus on helping the already apparent slow process of revival of the economy due to the lagged impacts of the three earlier stimulus measures, those of the monetary policies and the slowly emerging lower interest rate regime initiated by the public sector banks. Specific measures include acceleration of implementation of the rural and urban infrastructural projects, which are in the pipeline, by facilitating clearances at the state and central level including finance. Two, it?s imporatnt to ensure flow of credit at reasonable interest rates to the micro, small and medium enterprises (MSMEs) sector because it?s meeting the bulk of the strong rural demand in several local markets. The current terms on which refinance is being made available to this sector require revision so as to reduce the cost of credit. In the same context, given that international prices of capital goods and technology are currently ruling soft in a recessionary environment, it would be useful to facilitate technology upgradation of the MSMEs catering to export markets by extending the technology upgradation fund confined to textiles and export-oriented units.

Long-term agenda has to be shaped by two inter-related parameters: One, rise in the working-age population till 2026 and consequent reduction in child-dependency ratio termed as demographic dividend; and two, India?s entry into a higher and rapid growth trajectory that needs to be sustained to productively absorb the rising share of younger-in-age labour force.

The first requires substantial investment in human capital to raise the productivity of potential labour force. While the government has been raising plan outlays on health and education, these have to be matched by improvements in service delivery mechanisms. The second requires maintaining domestic investment climate, expanding supplies of physical infrastructural facilities and ensuring cost-effective services emanating from these facilities and integration with the global markets.

Major ingredients of investment climate include macroeconomic stability, short, time-bound, single-window clearances for establishing new businesses, availability of financial and physical infrastructural services at affordable cost.

Rajiv Kumar : Director & Chief Executive, ICRIER

Reduce bank lending rates

Of the first things, the government needs to do is to embark on structural reforms rather than continue to focus on fiscal stimulus. On monetary side, there is a need to reduce the bank lending rates. Also, there is a need to boost exports. Our share in world trade is around 1%. We need to have a thorough look at the export promotion mechanisms. Investment climate for the small and medium scale enterprises should be improved and if that is done, there will be a huge improvement in their business.

Removal of administered price mechanism for petroleum products and use of smart cards for public distribution system are some of the immediate steps that need to be taken by the government.

Subir Gokarn : Chief Economist, Standard & Poor?s Asia-Pacific

Power and transport need attention

In the short term, some of the critical ministries have to be given proper attention. Ministries dealing with infrastructure sectors and education are absolutely fundamental in the growth process and another short-term measure that is paramount is narrowing of the fiscal deficit in the Budget. The long-term agenda flows from the priorities that I have indicated in the short-term. There has to be a proper regulatory mechanism in place and efforts have to be taken in capacity addition across sectors.

In education, efforts need to be taken to provide basic education and job creation as well. If the government fails to provide jobs, it is going to cost it dear. The goal should be to maximise employment by making investments in infrastructure, labour market and responsive education. Three sectors that need immediate attention in the country are power, transport and urban development.

Some progress has been made in these sectors, but it has yet to reach a respectable threshold. Reforms in these sectors involve creating a regulatory mechanism, boosting private investment, and spending public money strategically.