Some highlights (in my eyes) from the PM’s interview to Wall Street Journal:
- My focus is to create a third sector, the personal sector. Essentially implying that a person doesn’t merely look for jobs in the market but actually becomes a provider of jobs. He becomes a job creator through entrepreneurship.
- and if you look at the entire post-independence phase of the country, you will find that in terms of money volumes the maximum disinvestment has taken place in the last two years.
- There are some states that don’t have industry but are primarily agricultural. They don’t need labor reform. Those states that have a substantial manufacturing sector, they need labor reform. And their state assemblies can adopt them. It is a joint subject of the states and the center, and if they send it to me, I will allow them.
- I have said publicly that for us, the U.K. is the gateway to Europe and, in the situation that the world is in, a united Europe would be favorable.
- There is no reason to change India’s non-alignment policy that is a legacy and has been in place.
- In a developing economy, state enterprises do have a role in some sectors. They have to be managed professionally and efficiently. We have given them operational freedom and brought in talent from the private sector as well to facilitate this. The state need not do business in certain sectors. We have a new policy on strategic disinvestment. We are in the process of identification of entities for strategic sale.
Shekhar Gupta and T.N. Ninan have written their weekend columns today on the contents of this interview. Their assessments strike me as somewhat harsh. Some of PM’s answers – on labour law changes and on privatisation – are nuanced and not outright rejection of the ideas. It is far better to move incrementally on some sensitive areas than go for eye-grabbing headlines that make no further progress. After all, the government had come up with a labour code. It is not going to be easy to push that through India’s various stakeholders.
India is struggling to make progress with changes to factor markets, particularly in land and labour. There is no political consensus in the country on these reforms. In February, Railway workers had given a strike call. It appears to have fizzled out. But, their demands had included:
scrapping of the Bibek Debroy report on restructuring and the National Pension Scheme, no privatisation/outsourcing/contractorisation of governmental functions, no foreign direct investment in Railways and Defence, filling up of all vacant posts, regularisation of casual/contract workers, among others. [Link]
Important are measurables for policy initiatives, time-frame for deliverables and readiness to abandon or change course if policies do not deliver. It is especially critical for the first item on the list of highlights above.
On a separate note, the second anniversary would have been an ideal opportunity to have held a national news conference with local and national media in all languages and answered a wide range of questions, including critical and candid ones.