Decision to raise railway fares welcome; much more needs to be done

There is steady evidence that the government’s September announcements on foreign investment in multi-brand retail, increase in diesel prices and other politically difficult decisions were not a flash in the pan. Telecom spectrum has been auctioned, albeit in a policy framework chosen by the courts. The formation, finally, of a Cabinet Committee on Investment should speed up project clearances. The decision to raise railway fares on Wednesday came as a pleasant surprise. On Thursday, it announced recapitalisation of public sector banks to the tune of Rs 12,500 crore. All this suggests that paralysis is no longer warranted as metaphor for the state of policymaking. This does not mean that occasional gurgles, wriggling and twitching will be accepted as conclusive evidence of release from palsy. The private corporate sector, whose failure to invest in capital formation is the primary reason for the economy’s poor growth this fiscal and last, will need to see coherent, supple action, to be reassured into resumption of investment. As power plants supplying Delhi shut down for want of coal, and remind the nation that India today has 50,000 MW of power generation capacity lying idle, thanks to policy failure that denies this capacity fuel, we need purposive action in a variety of areas, none of which brooks delay.

We need diesel prices to be decontrolled, kerosene subsidy scrapped and replaced with subsidised solar lanterns and cooking gas subsidy phase-out initiated by beginning investment in piped gas distribution in every major town. Break up Coal India into competing entities and redefine a captive miner as anyone with a long-term supply contract with a producer entitled to captive mines, pending scrapping state monopoly in coal. Make all toll plazas in the country accept only electronic payments, debited while vehicles zip past, sporting prepaid cards that can be purchased from wherever mobile phone vouchers can be purchased. Turn liberal with the number of new banking licences. Act on the good intentions announced repeatedly on fixing fertiliser subsidy. There is so much that can be done, once you choose not to be paralysed. The point is to muster the will to act.