Push has come to shove

Context – More steps should be taken in Agriculture, labour etc sector to make India atmanirbhar.

Market reaction to stimulus

• Sensex crashed by 1069 points on Monday.
• Goldman Sachs – GDP forecast (-5%) for current fiscal year.
• Pronab Sen – GDP Forecast (-9%) for current fiscal year.

Disinvestment and Free Trade

• Govt will notify a list of strategic sectors in which maximum of 4 PSUs will coexist with private sector competitors. In Non-strategic sectors, all PSUs will be privatised.
• Reaction: Labour Union opposed the privatisation of PSUs and two Organisation have opposed India’s inclusion in RCEP.
• Measures required

• National Security list must be kept short.
• Jurisdiction for privatisation should be shifted entirely to a new ministry for disinvestment as every ministry tries to sabotage the process of privatisation of PSU it controls.
• PSUs must be allowed to downsize the workforce from the experience of Air India.

Agriculture Reforms

• APMC reform will free farmer to sell produce outside the mandis but cooperation with the states is required.
• Abolition of Essential Commodities Act will allow unimpeded stocking and movement of all goods. This will encourage investment in cold storage by private sector.

• Measures required

• India need new agricultural tenancy laws that ensure that owner can get his land back at the end of lease period. This will incentivise small holders to lease land to large farms with scale economies.
• Allow corporations to start commercial farming.

Labour Reforms

• Many states have amended labour laws to attract investment but for temporary period.
• Measures Required

• Above amendments should be made irreversible. Unemployment insurance should be provided.
• Gujarat SEZ model of paying 45 days salary for each year of service to laid-off workers should be adopted.
• State Govt should learn from labour laws of Bangladesh which attract 50000 workers apiece.

Electricity Sector

• State owned DISCOM has accumulated losses of 1 lakh crore rupees.
• Measures Required

• Reform must be incentivised by limiting central permission to states to borrow.
• Cutting theft and transmission losses.
• Installing smart meters to remote payments and disconnection.
• Privatising distribution companies to improve efficiency.

Self-Reliance

• Interpretation of self-reliance is to create such an institutions and policies that India can flourish without concession from others and compete with the best.