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Three years of UPA-II: 5 key reforms that got away

Three years after the UPA government came to power, it still hasn't moved on key reforms.


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The United Progressive Alliance government started its second term three years ago on a strong note. With economist Dr Manmohan Singh at the helm, markets welcomed the government in anticipation that it would carry through key reforms this time around. Three years on, they are still waiting. Here are five key reforms the markets have been looking forward to and on which the government has been dragging its feet. 

Organised Retail: The move to open up the retail sector to foreign players has been hanging fire for years now. While cash-and-carry wholesale stores are allowed 100 per cent foreign direct investment, FDI in multi-brand retail that would allow players like WalMart, Carrefour and Tesco to directly enter India via a 49 per cent ownership has been blocked  by both Opposition parties as well as allies.

FDI in Insurance and Pension: Both these major financial bills have been pending. While insurance will bring much needed capital and best practices into the industry, pension could diversify fund management.  Foreign investment in both is capped at 26 per cent, but the UPA government has not moved to raise the cap to 49 per cent.

Fuel subsidies: There has been virtually no movement on deregulating fuel prices. Petrol has officially been deregulated but the government has failed to move on hiking diesel, kerosene and LPG prices given the political sensitivity of these commodities. The only concession it has made so far – only earlier this month, as a matter of fact – is to bar members of Parliament, legislative assemblies and gazetted officers from buying LPG at subsidised prices.  

New Tax regulations:  Both the Goods & Services Tax and the Direct Tax Code bills have passed their implement-by date.  Now it look unlikely that either will be ready for rollout before the next fiscal, especially given states’ opposition to the GST.

FDI in Aviation: The proposal is ready, but this, too, has been marred by political will in light the mess   the civil aviation sector – particularly the state-run Air India – finds itself in. With almost all airlines bleeding money, bringing in fresh equity and expertise would be welcomed by the sector, but the UPA   government has not made an effort to push it through.

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