NEW DELHI: The Bharatiya Janata Party's poll setback in Delhi is unlikely to blunt the Narendra Modi government's resolve to pursue policy changes aimed at taking the country to a high-growth trajectory, despite calls from some quarters for more populist measures.
"Reforms will be pursued as planned," a senior government functionary told ET.
A section of the BJP believes that the government may now be under pressure to present a relatively pro-poor budget and shun the 'bitter medicine' that it might have been planning to administer
But finance ministry officials believe that the budget which will be presented on February 28 will press forward with the government's reform agenda. The focus will remain on delivery, better governance and a more robust economy--pledges that propelled the BJP to power at the Centre in last year's general election
Economists said only policy changes will drive business sentiment. "I do not believe that the hostile Delhi verdict will be taken as a referendum on the Modi government by the larger investor community watching India," said Abheek Barua, consultant at the Indian Council for Research on International Economic Relations (Icrier). "Some steps such as marrying the foreign and economic policy to drive economic gains for the country would inject new dynamism in the so far unimaginative foreign policy... Reforms will be carried forward."
The budget is being seen as a blueprint for the Modi government's economic programme over the next few years.
"In the near term, business sentiment will be driven by the manner in which the Union budget lays out a road map for reviving investments, especially in the infrastructure sector, its emphasis on important structural reforms, as well as the ability of the government to obtain approvals from both houses of parliament for the recent ordinances, particularly those related to land acquisition, mining and insurance," said Aditi Nayar, senior economist, ICRA.
Initiatives to reform the banking sector to ensure availability of smooth funding to drive growth and the farm sector are already in the works. The finance ministry also has a key report on the overhaul of the bankruptcy law in the country.
Copyright © 2015 Times Internet Limited. All rights reserved.
No comments:
Post a Comment