Source: DNA India
Having placed proven performers in key economic ministries, the ground is prepared for the Modi government to embark on an aggressive reform agenda
With the business community growing impatient at the NDA government’s delay in ushering in big ticket economic reforms, Sunday’s Cabinet reshuffle sends out a clear signal that their wait is ending. In allocating railways to Suresh Prabhu, defence to Manohar Parrikar, and skill development to Rajiv Pratap Rudy, Prime Minister Narendra Modi has picked with care, three men with proven competence for ministries at the core of his “Make in India” and privatisation agenda. The railways have incurred operating losses of Rs50,000 crore in the past two fiscal years, while the annual defence expenditure has risen to Rs229,000 crore. The UPA’s penchant for utilising the railways as a vehicle for populism was not matched by similar urgency to articulate a modern and inclusive vision for this vital arm of the Indian economy. In defence, crucial foreign acquisitions like artillery, fighter planes, warships, spare parts and technology transfers for the Indian armed forces have been delayed by the endless haggling over technical specifications and fears over corruption vitiating the process.
The Modi government has already unveiled broad contours of its rail policy; Prabhu’s task will be to give it concrete vision and then quickly implement it. In August, the Cabinet cleared 100 per cent FDI in rail infrastructure. Plans to roll out proposals for dedicated freight corridors, high speed trains and suburban-rail network through public-private partnerships have been mooted. However, there is ambiguity on their viability and on reorienting existing departments. Similarly, the defence industry is also awaiting concrete signals from the Centre on how 49 per cent FDI will play out in a sector dominated by non-performing PSUs. Both Prabhu and Parrikar have the unenviable job of clearing policy cobwebs and guiding public sector behemoths into a new age where they could possibly play vastly diminished roles. While skill development is a low profile portfolio for Rudy, who was once civil aviation minister, it figures high on Modi’s plans to create a “demographic dividend” by skilling young people through vocational education and boosting India’s manufacturing base.
However, Sadanand Gowda will rue the fact that he was judged even before he got a fair tenure to reset the largest and most entrenched bureaucracy in the Indian government. Modi’s focus on the economic ministries is in line with his tenure as Gujarat Chief Minister; so is his inattention to the social development sectors. By all accounts Smriti Irani is out of depth in the human resources development ministry but she has been given a long rope. But more strange is Harshvardhan’s exit from the health ministry. He had demanded strong curbs on the tobacco industry, attacked unethical practices in the medical industry and crisscrossed the country to examine public health facilities. It is unclear, yet, whether the BJP visualises him as the chief campaigner in the upcoming Delhi polls, and so this transition to the lightweight portfolio of science and technology. Incoming rural development minister Chaudhary Birender Singh’s unremarkable stint in the Congress negates any chance of him fighting for the MGNREGA or the land acquisition laws, both of which are in danger of being diluted. Despite losing the defence ministry, Sunday’s surprising development was Arun Jaitley being suitably compensated with the information and broadcasting ministry. The trio of Modi, Jaitley, who has become the PM’s eyes and ears on policy matters in the government, and Amit Shah, who is implementing Modi’s political strategy on the ground, represent the new power centre in Indian politics. Their hegemony in the BJP could go unchallenged for a long time to come.