Ending the uncertainty, the BJP-led NDA government is all set to begin its second successive term. Now, when it has received a massive mandate, the Modi government has an opportunity to push tougher reforms — particularly land and labour, the analysts said. The government should take long-pending hard decisions quickly in the first year itself to reap benefits later, they added. There is a need to increase infrastructure spending, privatisation and asset monetisation, rating agency CRISIL said in a report. The economy that is undergoing cyclical downturn currently needs an urgent push, it added. The government should come up with time-bound reforms for employment generation and industrial flexibility, CARE Ratings said, adding absolute majority would help in doing such. A re-look on land acquisition policies would help to get investments from foreign and private capital, it noted.
Transparent auctions and digitisation on the land front are some of the reforms that may enable environment for labour in India, Goldman Sachs said. The distress in the financial and farm sector also needs to be addressed at the earliest, CRISIL noted. Sharing its views, global brokerage CLSA said that an absolute majority for the BJP would cut down on the need for competitive populism. The rate cut and market-friendly cabinet could be the next trigger, it added.
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Analysts at the Japanese brokerage Nomura said that the policy priority in the second term will be re-fuelling growth with prudence as against the BJP’s first term where prudence came at the cost of growth. Commenting on the need to speed up employment generation, something that the Modi government was criticised in its last stint, CRISIL said that manufacturing and labour intensive segments needs attention of the government. These sectors would not only create more jobs, but also raise India’s growth potential.