Arun Shourie bats for immediate innovative reforms

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Pushing for immediate economic reforms to bail India out from its "precarious financial condition", former union minister Arun Shourie Sunday urged the states to use Article 254 to push for progressive legislations.

Delivering a lecture on "Instigating Reforms" to mark the 121st birth centenary of celebrations of eminent scientist and applied statistician Prasanta Chandra Mahalanobis (1893-1972) at the Indian Statistical Institute here, Shourie said innovative reforms were indispensable for the country, which is steadily getting into a debt-trap.

"India is steadily getting debt-trapped... the situation is so precarious that our leading banks and public sector undertakings (PSUs) are failing to raise money from the market. Immediate and innovative reforms have become indispensable," said the former minister of disinvestment during the previous NDA government.

Shourie put the onus on states to push for reforms by making legislation using Article 254 which deals with inconsistency between laws made by parliament and the state legislatures.

"Everything cannot be done by Delhi. States need to come forward and resort to Article 254(2) of the constitution that allows the state legislation to prevail, provided the president gives his assent. If a few progressive states start, the rest will follow suit," he said.

"By creating a holding company for the PSUs and the public banks, we can raise money from the market against the collective assets. On the other hand, there is an urgent need to monetise assets which are idle or non-performing," he said.

Shourie laid emphasis on disclosure of all financial transactions by PSUs and banks and financial institutions.

"PSUs and financial institutions are often forced to buy shares of other PSUs to allow them to raise money. Quarterly disclosure of financial transactions by all PUSs, banks and financial institutions should be made," he said.

The senior Bharatiya Janata Party leader also criticised policy makers' reliance on only official data which are often vastly different from the indices on the ground.