amandeep kaur ,F1> parteek >F2, mba http://youtu.be/69XVLLL0-J0

AMANDEEP KAUR, 1273502, F1

 Q.4) Comment on stalled reforms.

Ans.) Introduction:- stalled reform is the disinvestment process, which remains slow-moving and appears to be driven more by short-term concerns over filling the government’s coffers than a genuine recognition of the need to reduce the role of the state in economic affairs. Of the government’s 213 state-owned companies (public-sector utilities), the government has pledged to divest interests in some 45 loss-making PSUs in 2011-12. The government has also failed to demonstrate any urgency to relax FDI limits in several sectors such as the $450 billion retail market, where foreign investment is barred in multi-brand retail. Similarly, the Insurance Laws (Amendment) Bill 2008 that proposes to raise FDI limits in the sector from 26 to 49 per cent has been stalled in parliament since 2008.

Discussion:-Several crucial bills on issues ranging from mining policy, to foreign direct investm ent (FDI) in front-end retail, land acquisition and corporate governance remain stalled in parliament. Moreover, a false sense of security appears to have crept into the Congress since its re-election to a second consecutive term on a strengthened mandate. This complacency has been fueled in part by the more than one trillion rupees (US$22 billion) collected from the auction of spectrum for 3G telecom services in 2010, which has reduced the urgency to curtail the fiscal deficit despite the government demonstrating little restraint to spend on a growing number of social welfare programmes. Despite the presence of a prolific private sector, high savings rate and large and growing domestic market, economic exuberance is not sustainable in the absence of several fundamental reforms. These include the fact that the country still remains a largely agrarian economy held hostage to annual rainfall in the absence of much-needed investment in irrigation infrastructure.

The main problem plaguing India’s mining and infrastructure sectors is the issue of land
acquisition, given the political sensitivity associated with the conversion of agricultural land for industrial use. Recent violent protests by farmers in the Greater Noida region and Uttar Pradesh state over compensation for the construction of a highway project serve to highlight the difficulties associated with land acquisition for high-profile infrastructure projects.

Conclusion:- Amid these problems a government committee has been established to assess the pricing and allocation of national resources, such as hydrocarbons, minerals and radio spectrum, including calls to place their management under independent agencies to deter corruption and accelerate the pace of reform. While the government continues to pledge rhetorical support for economic liberalisation, actual progress remains slow, patchy and sometimes even counter-productive. No progress is likely on implementing much-needed structural reforms in the short term. Driving the slow pace of reform in India is the consensual nature of its politics and well-ingrained socialist ideologies that still dominate political discourse.

The government appears to have become complacent under pressure from appeasing coalition partners, the presence of a weak and fractured opposition and the ruling Congress party trying to live up to its pro-poor image. India is likely to continue to be held back by a slow-moving “Indian rate of policymaking” until the next economic crisis forces to it to accelerate the next generation of reforms.