Economic Survey 2009 snippets

With the Left no longer a factor in the stability of the UPA government at the Centre, the pre-Budget Economic Survey for 2008-09 championed reforms with a vehemence and zeal not seen in recent editions of this annual document.
Disinvest at least 10% of all unlisted PSUs, auction unrevivable loss-making ones, raise minimum Rs 25kcr/year through sale.
Decontrol petro product prices, phase out subsidy on kerosene, limit cooking gas subsidy to 6-8 cylinders per household per annum.
Do away with govt OK for retrenching workers in big units while increasing compensation, allow contract labour in non-core work.
Hike foreign equity cap in insurance and defence production to 49%, with 100% in special categories.
Allow private entry and 49% FDI in nuclear power .
Denationalise coal, sell old oilfields to pvt sector, make power supply competitive by allowing open access.
Let public hold more equity in PSU banks, gradually increase FDI limits in banks, ease foreign entry.
Phase out commodities transaction tax, securities transaction tax and fringe benefit tax, rationalize dividend distribution tax to avoid double or zero tax.
Lift ban on futures contracts in financial markets, develop exchange-traded spot, futures currency mkts.
Allow FDI in multi-format retail, starting with food.
Decontrol sugar & fertilizers, switch producer subsidies to consumer subsidies.
Limit drug price controls to essential drugs with less than five producers.
Set up environment regulator to give clearances, let ministry deal only with policy; keep housing and real estate devpt out of central environmental regulation.
Increase work week to 60 hrs & daily limit to 12 hrs to meet seasonal demand.
Have single regulator for all forms of transport—highways, rail, ports, air.
Scrap indirect taxes on buses, allow pvt players to improve public transport .
Delink spectrum from telecom licences; auction it and make it tradeable among licence holders. Allow pvt sector to run trains to tourist destinations.
Corporatise departmental enterprises providing commercial services, convert port trusts into listed firms with min 49% public equity.
Link small savings rates to govt bonds/bank deposits.
Enact new bankruptcy law for speedy, effective redeployment of assets .
Streamline land use conversion from rural/semirural to urban communities.
Bring all financial markets under SEBI regulation.
Implement police reforms, review old laws.
If past experience is any guide, it will be incorrect to read the suggestions put forward in the Survey as a pointer to what is to come. More often than not, it is an annual airing of a wish-list by the mandarins of the finance ministry that has little bearing on what the government can actually implement. The disconnect between a wish-list and a mustdo list has only been aggravated in the era of coalition politics, and despite the absence of the Left, not too many would bet on this one being converted to become areality any time soon. Reforms apart, the Survey concedes that no matter which way you measure it, at least 60% of Indians subsist on less than Rs 20 per day and that malnutrition remains worryingly high and has not declined significantly. It also says the economy’s performance in the current year could be a mirror image of what happened in 2008-09 with the first two quarters exhibiting sluggish growth followed by a pick-up in the second half of the year. That means we should end up with an overall growth rate of around 7%. This scenario is subject to the caveat that the US economy bottoms out in September this year. If that were not to happen and the US continues to slide, India’s recovery too may be more modest.