The reshuffle of the Union Council of Ministers cannot, by any means, be considered sufficient to reinvigorate a United Progressive Alliance (UPA) government viewed as either moribund or beset by paralysing inter-ministerial wrangling. The reshuffle, which was unnecessarily and excessively delayed, comes a full six weeks after the government’s much-discussed administrative measures – a slight increase in diesel prices, a cap on the number of cooking gas cylinders supplied for domestic use, and liberalisation of foreign direct investment in retail and civil aviation – were announced. Those measures were largely welcome, but were too little and too late. Unless the reshuffle is followed by sufficient speedy activity to follow up on the reforms push, neither the October reshuffle nor the September measures are likely to lighten the November gloom.
What should come next? At least part of the agenda is widely acknowledged. The parliamentary affairs ministry, now under the management of Kamal Nath, has to move to pass blocked legislation on insurance and pension reforms, which have been cleared by the Cabinet. Early action on this front should be able to strengthen both these sectors. In particular, the ministry of corporate affairs – now with Sachin Pilot – should not delay the new Companies Bill. Meanwhile, much attention has focused on the divestment from Jaipal Reddy of the petroleum portfolio; he had done good work in closing the ministry’s doors to corporate influence. But he also delayed fuel subsidy reform. If the government wishes to demonstrate that it removed Mr Reddy not because of the disagreements between his ministry and Reliance Industries over natural gas production from the KG-D6 field, but because subsidy reform is vital, then the new minister – Veerappa Moily – should produce a road map to fuel price rationalisation, with dates. Mr Moily’s decisions on expanded exploration, contract renegotiation and the rationalisation of fuel subsidies are all important; they should be taken soon, and transparently.
Finally, there are three long-promised game-changers for UPA-II. The goods and services tax still appears distant, since the UPA seems unable to either convince some states to sign up – possibly with suitable financial compensation – or move ahead without agreement across all states. Then there’s the land acquisition Bill, which is being reviewed by a group of ministers. The Cabinet can and must clear it within a fortnight. Finally, there is the move to incorporate Aadhaar into the welfare payments architecture. Aadhaar-linked payment must be made an option as soon as possible for not just the schemes currently advertised, but also for fertiliser and food subsidies. None of these requires crucial input from a ministry with a change of personnel at the top; the Cabinet reshuffle was largely irrelevant when it comes to pushing forward UPA-II’s flagship reforms.
It is clear that the UPA government, the Congress party and the prime minister are convinced that the perception of drift has gone far enough, and that “animal spirits” – to use the PM’s favourite phrase – need to be revived. But this will require more than adjustments in perception. The new team Dr Singh has put in place needs to produce results in weeks, not months.