Raghuram Rajan’s suggest 10 points to the Indian Economy
Pressure has been placing on the Modi government to implement signs of economic stagnation, described last week by former finance minister P Chidambaram as “the most urgent and combustible issue of each day.”
So what can the administration, which arrived in power for the first time to give better voters days ahead of UPA years, do to repair it?
Raghuram Rajan’s got no plans. The former governor of Reserve Bank, now director of finance at the renowned Booth School of engineering, is spelling out his road map in the feature story of this week’s version of India Today publication.
In the meantime, here’s a sneak-peek of Rajan’s program.
- LAND ACQUISITION: Propel land mapping and the system of developing ownership rights, especially in the world’s poorest. Establish straightforward processes for determining and altering land area and for registering changes in possession. Allow forcible ownership of property extremely rare. For rare cases, simple purchase processes when protecting the rights of buyers.
- LABOUR: Enable more flexibility in employment contracts. Amend the law to enable for an interim arrangement in which employees are continuously entitled to work hours, but do not have to be made permanent. Established contract employees of Grandfather.
- DECENTRALISE: Ministers for Empowerment. The Systems of Engage. Begin by amending the terms of reference of the 15th Finance Committee. Don’t increase the state’s share of income.
- INVESTMENTS: Stabilize tax and regulatory structures to make them reliable. Address proposed changes in general to allow the company time to acclimate. Imagine an independent international monitoring body to offer shareholders trust that they will not be abruptly set back by the government. Avoid leaning against an untrained tribunal for solutions.
- DISINVESTMENT: Underinvestment is not primarily a matter of increasing money. Avoid selling to already dominant family businesses in order to consider the concentration of power.
- REAL ESTATE/CONSTRUCTION/INFRASTRUCTURE: Quick-track restructuring of default projects. Make super senior loans for insolvent investors in order to complete programs.
7. NBFCs: The RBI may carry out a quick review of the value of the capital of the largest NBFCs. Offer fresh chits to the well-capitalized. Give government funds to the undercapitalized only at a strong cost.
8. POWER: Guarantee that the energy is properly regulated and calculated. Encourage competition between energy distributors.
9. TELECOM: In the short term, sustain ample rivalry in the telecommunications market. In the longer term, re-examine administrative mechanisms to maintain a level playing field.
10. AGRICULTURE: Ensure better access to resources such as plants, engineering, energy financing, and insurance. Enable the renting of land and the mutual sharing of resources such as tractors. Enhanced connectivity — both online and through logistics networks — of producers to factories, the agricultural economy, and final customers. Abolish distorting government intervention in marketing and recruitment. Penalize farmers for removed subsidies via direct cash payments dependent on acreage. Enable certain farmers to shift out of farming, enabling economies of scale for those who stay.