The flurry of reforms announced by the government on Wednesday reflects its determination to finally go ahead with reforms that don’t need to be created through legislation. There are several such reforms that can be undertaken and questions were being asked about what looked like a paralysis in decision making.
Among the 12 reforms announced, the two that would really help the people and the economy are the long-awaited gold monetisation and sovereign gold bond schemes and permission for telecom companies to trade their excess spectrum. Gold monetisation will enable households to earn money on their gold. It is now up to the banks to come out with attractive consumer friendly schemes to create win-win situations for them as well as the households.
If successful, it would help to curb huge imports that drain the country’s foreign exchange. Hopefully details of the schemes, particularly the rate of interest that they will give, will be announced as soon as possible and investors will not have to wait. On the telecom front, harried consumers can expect better service as the telecom companies blamed lack of spectrum as a major factor contributing to call drops.
Other very significant reforms are 100 per cent FDI in white label ATMs, and the move to bring down corporate tax to 25 per cent and phase out the 38 deductions that brought down the effective rate to 23 per cent. This will certainly help bring down the fiscal deficit. The government’s new verve is welcome and it is hoped more reforms will be announced without much loss of time.
