Suresh Prabhu, who offered to resign as Railway Minister following a spate of accidents, has perhaps been given the benefit of doubt for his sterling record as power minister in the Atal Bihari Vajpayee government.
The Rajya Sabha member of Parliament from Andhra Pradesh, who has been given charge of the commerce and industry portfolio, will now have to play a key role in using exports as an engine for growth and come up with a new industrial policy that will offer a road map and practical solutions to the industrial sector that is reeling under the impact of demonetisation.
The challenges are many as the previous commerce and industry minister, Nirmala Sitharaman, who has moved on to defence, has had an indifferent track record. The three years of her tenure at the commerce and industry ministry saw merchandise exports fall to $274 billion in 2016-17, after reaching $310 billion in 2014-15 and $262 billion in 2015-16.
“Every responsibility of the government is important and this is my ninth Cabinet-level position,” Prabhu said after Sunday’s reshuffle. His new task would be to ensure rapid economic growth of the country, he said.
Officials point to a slowdown in the global trade growth, apart from a crash in prices of raw materials like processed petroleum, industrial metals and meat, which India exports heavily. Domestic exporters, however, say the issue of falling competitiveness, loss of foreign market for strong sectors like apparel and engineering goods and a growing trade gap with China are more serious concerns.
Also on Prabhu’s agenda will be at least 16 free trade agreements that India is currently negotiating with nations or nation groupings. While the completion of new agreements have been painstakingly slow, industry voices saying existing trade deals — such as the ones with Japan or Korea — haven’t benefited India have grown increasingly stronger.
Besides, India hasn’t made much progress during Sitharaman’s tenure at the World Trade Organization on matters of international trade rules. Its long-time demand of a permanent solution on stockpiling of foodgrain or a special safety mechanism for agriculture hasn’t materialised. Prabhu will also have to increase pressure on global Trade Facilitation Agreement on Services which had been proposed by India.
The investment front seems better secured as the Department of Industrial Policy and Promotion had under Sitharaman managed to ease more than 87 FDI rules across 21 sectors to accelerate economic growth and boost jobs.
As a result, one of the key poll promises of Prime Minister Narendra Modi — that of attracting foreign capital — has shown net positive results. FDI inflows rose 23 per cent to $55.6 billion in 2015-16, creating a new record. In 2016-17, the figures were even higher at $60.08 billion.
The incoming minister’s toughest challenge would, however, be to jump-start the industrial growth machine. At 5.7 per cent, the latest June quarter gross domestic product growth figures were the lowest since the Modi government came to power.
Prabhu’s tweet indicated his exit from Rail Bhawan: “Thanks to all 13 Lacs+ rail family for their support, love, goodwill. I will always cherish these memories with me. Wishing you all a great life,” he said.
Thanks to all 13 Lacs+ rail family for their support,love,goodwill.I will always cherish these memories with me.Wishing u all a great life— Suresh Prabhu (@sureshpprabhu) September 3, 2017