The Narendra Modi government will follow the precedent of successful policies of the earlier NDA government. It must resume and expand the Vajpayee initiatives: aim for fiscal balance, privatisation of state-owned enterprises, massive infrastructure investments, market-determined petroleum product prices, and focus on agriculture infrastructure while integrating them into the rural employment guarantee scheme. Modi has said he will aim at improved economic efficiency and better implementation. He has to rationalise subsidies, expenditures on them, and better target the intended beneficiaries to minimise waste and leakage. The UPA’s social programmes have wasted huge funds and encouraged corruption. They have not built assets and failed to build for the future. He must drastically reform the administrative services to improve individual accountability and punish malfeasance.
The new government must not junk Aadhaar as some of its members want. Instead, the government must expand the direct benefits transfer of welfare payments to bank accounts using Aadhaar. It must stimulate banks to open micro-bank branches. Public-private partnerships were a great idea of the UPA, but like so many of its ideas, very poorly implemented. Accountability of all concerned government departments for time-bound clearances must be introduced to encourage private investment. PPP contracts must not ask for tariffs to be set for 25 to 30 years as is the case now, but only for the period required by lenders, usually 12 years. The debt-equity ratio should be raised to 2:1 against the present 66%-80% for debt. The present ratios have led to huge non-performing assets with banks, as projects make little progress due to raw material uncertainties, lack of government clearances, aggressive bidding and poor implementation.
Agricultural infrastructure must get private and public investments in warehouses, cold stores, refrigerated transport, rain water harvesting, water storage, canals, etc. The government must get out of agricultural marketing and allow local initatives, now helped by better rural roads an transportation, and better communications due to mobile telephony. Minimum support prices must not stimulate more grains production. The government must accelerate clearances for genetically modified seeds to improve productivity. The MGNREGA must build agricultural assets, not just give money away.
The NDA government must control black money creation and the large holdings overseas by Indian citizens. No capital gains tax on investments from Mauritius and participatory notes have enabled vast money laundering on a vast scale by politicians, businessmen and bureaucrats. This must be stopped and these enabling routes be closed, or