Coalition governments have done big reforms, then why are questions being raised on NDA 3.0, know the complete math

New Delhi: BJP had talked about making the country a global manufacturing hub and a ‘developed India’ by 2047, but the new NDA government to be formed under its leadership may face difficulties on many fronts. Experts say that apart from land, labor, agriculture and privatization, BJP will have to give more importance to the opinion of the allies in the matter of reforms related to BI and Digital India. In the last two terms, the Modi government had put a lot of emphasis on selling stakes in government companies and privatization of public enterprises. Steps were taken towards the privatization of IDBI Bank, but the matter could not reach its conclusion. Apart from selling Air India to Tata Group in 2022, the Modi government could not do any major privatization. In FY24, the target was to raise Rs 51 thousand crore from disinvestment, but in the interim budget the revised estimate had to be made Rs 30 thousand crore.

Labor codes were not approved in many states

The Modi government had created 4 labor codes by combining 29 labor and industrial laws, but it could not notify them. Many states have also not approved the labor codes. Similarly, the law making land acquisition easier for companies had to be withdrawn in 2015 due to strong opposition from farmers. 3 agricultural laws also had to be withdrawn in 2021. All this happened when BJP had a majority in both the previous NDA governments. Now BJP has to depend on other allies including JDU and TDP. In such a situation, the new government will have to adopt a different strategy from the previous stance. Rating agencies and economists say that in such a situation, these major reforms may have to be postponed for some time.

Economist and former professor of economics at JNU Arun Kumar said, ‘All these steps were being taken keeping in mind the interests of the corporates. But these pro-corporate policies will now have to be postponed for some time. Modi will now have to wait for the coalition to become stable. Outgoing Finance Minister Nirmala Sitharaman had said that if the Modi government is formed again, all kinds of next generation reforms including land, labor, capital and digital infrastructure will be done.
However, Fitch Ratings says, ‘Now some important points of the reform agenda may face challenges. It will be more difficult to move forward on controversial reforms, especially in the case of land and labor reforms.’ There are many bills like amendments to insurance laws, Insolvency and Bankruptcy Code Amendment Bill, Digital India Act 2023, Drugs Medical Devices and Cosmetics Bill 2023 and Pesticides Bill, on which the previous government had problems and now it may be more difficult to get them passed. Rating agency Moody’s said, ‘The budget’s focus will remain on infrastructure and manufacturing, but given that the BJP does not have a majority on its own, major economic and fiscal reforms may now be delayed.’

A consensus must be reached

Senior economist Abhijit Mukhopadhyay said, ‘This narrative is spread that GDP growth decreases in coalition governments and economic reforms are hindered, but GDP growth was the highest during the UPA-1 government. At the same time, despite the BJP having an absolute majority, the NDA government had to withdraw 3 laws related to agriculture.’ Actually, there is not much point in worrying about economic reforms stopping in coalition governments. The major economic reforms in the country were started by the coalition government of PV Narasimha Rao. Many reforms were done by the Vajpayee to Manmohan Singh governments. The issue is to build a consensus. The experienced leaders of the NDA 3.0 government will also do this. What is there to doubt in this?