The distinct slowing down of the economy reflected in the April-June quarter GDP numbers brings a sense of déja vu. The only thing new is that India is no longer the second fastest-growing economy, after China, and has been overtaken by Indonesia. We could well be overtaken by Malaysia if the Manmohan Singh government continues to remain comatose.
After the exit of Pranab Mukherjee, who was seen as a hurdle, there has been no worthwhile action, besides forming committees, from the Prime Minister who talked of reviving the “animal spirit” of industry, or the new finance minister, P. Chidambaram, who for some reason is taking a fresh look at the already inordinately delayed direct tax code.
There are various decisions that can be taken without obstruction from the Opposition, or even if Parliament is derailed, like tax reforms, getting going vital projects held up on minor grounds, plugging loopholes in the NREGA and implementing various options on the diesel front which would cut subsidies and the fiscal deficit.
One of India’s most respected businessmen told business channels this week that in the last 14 months he has had two meetings with the PM, four with Mr Mukherjee, and with Kaushik Basu, to remove a bottleneck hampering exports in the IT industry that would take just a few hours. But in vain. Policy paralysis continues.