Cleaning up mandis, property registration to begin with
Now that Dr Manmohan Singh has announced his retirement, and Rahul Gandhi is set to be the Congress party’s prime ministerial candidate, the question is who the real Rahul Gandhi is. Someone who, like his mother, plumped more for inclusion in the past, but now realises that you can’t have inclusion without economic growth? Certainly that’s what he suggested to a Ficci audience, while charting out a path towards greater growth. So, he said, industry needed the right environment if it had to flourish. Among the various things that made up the environment, clearly was the environment ministry since he even had the minister shifted out prior to his speech. The other, he said, was labour laws. If India needed to generate 100 million new jobs in the next decade, it could not do this until labour laws were made more flexible—manufacturing’s share in employment has fallen from 11.1% to 10.5% over just the last decade.
How much of this agenda can Gandhi possibly implement over the few months that are available to him? There are limits, but if he wishes to demonstrate his commitment, there is enough that can be done. After all, he has told all Congress chief ministers—this applies most to Maharashtra since it hosts India’s second-largest mandi—that they must remove fruits and vegetables from the APMC Act, implying that buyers can deal directly with farmers, bypassing the cartelised mandis. Cleaning up the Vashi mandi in Mumbai is clearly something that can be done. Indeed, since the Congress ruled Delhi all these years, not cleaning up the Azadpur mandi of cartels was one of the biggest opportunities Gandhi lost. Similarly, working to clean up property registration in Maharashtra or the process of land conversion in Haryana are well within his purview.
Labour reform is a bit more complicated since the Industrial Disputes Act is in the concurrent list—this means no state can overrule this. So, since the central law states that no company with more than 100 workers can retrench them without getting government permission, a Maharashtra cannot unilaterally hike this to 300—it can, like West Bengal and Kerala have done though, reduce the number to 50. What Gandhi can do, though, is to start talking of introducing an NIMZ-type insurance fund for the non-NIMZ units as well—this involves setting up a fund from units to pay 3-4 months salaries to workers who lose their jobs and to re-train them to be able to pick up another job. Apart from ensuring environment clearances are quickly given to projects where the necessary panels have already given the requisite go-ahead, Gandhi can ensure the government doesn’t start going back on reforms. Raising the cap on subsidised LPG cylinders, as is being contemplated now, is one such. If the government moved quickly on clearing investment hurdles—this includes fixing a uniform spectrum usage charge for telecom, clearing Japanese funding for DMICDC—and got in one or two more large FDI retailers, it would change the investment climate in a big way. Opting for growth may or may not change the Congress’ fortunes, but it would mean Narendra Modi isn’t the only pro-growth game in town.