Model code, productive use

The government is now closed for business, or at least serious business, until the first week of June. After the announcement of the general election dates and the enforcement of the model code of conduct, no policy decision will be made until a new government assumes office. The terribly elongated polling process, perhaps necessary to ensure free and fair elections in every part of India, means that almost a full quarter will be lost for policymaking. At a time when the economy is still facing challenges on the growth front — industrial growth was just 1.7 per cent in January — precious time will be wasted.
 
However, that is the reality. Unfortunately, in a country which is in the election mode every year, such frequent periods of policy pause are costly. In principle, therefore, the PM’s call for simultaneous elections (or an alternative US-like system where there are two election cycles every four/five years) makes sense for an emerging economy that still needs continuous, uninterrupted policy change efforts. That said, is there a way the lull can be put to productive use? The answer is yes.
 
In the context of a general election, it is important to acknowledge that the actual time wasted in terms of policymaking may actually be more than three months. The fact is that the attention of the government in the quarter preceding the election announcement is usually focused on what may broadly be termed as populist measures. It is certainly not the time for challenging reforms. And often, post-election, the energies of a new government in the first three months is focused on personnel changes and planning an agenda for governance rather than on policy implementation.
 

Illustration by Binay Sinha

It is imperative for a new government to hit the ground running especially in a scenario where growth prospects are still below full potential. Since the incumbent government strongly believes it has a very good shot at a second term, it must use the next two and half months to nudge the bureaucracy to work hard on policy blueprints so that several initiatives are ready to either be introduced in Parliament as legislation or to be announced as executive action in the month of June.
 
Those who are familiar with the working of the government would know that processes take inordinately long. There is, of course, the usual hierarchy of each ministry where files must pass from the lowest level to the highest level with each official adding his or her views on a proposal. Policy decisions also require consultations with other ministries that may have a stake. They require consultation with external stakeholders. In the case of legislations, they need careful drafting and vetting by the law ministry and legal officers of the government. It would be prudent to use the period of the model code of conduct to go through some of these processes on a few big ideas that the government would like to implement in its next term, rather than wait to begin in June.
 
At the very least, this could help build up a consensus within the bureaucracy on pending policy matters. At its best, it could enable a big bang first 100 days for the next government. There are cases where ordinances have been issued. These can be converted to legislation immediately in June. There are cases where policies have been announced, like the National Mineral Policy in the penultimate cabinet meeting of this government, but where implementation would require changes in existing legislation. The ministry concerned, the Ministry of Mines, should be ready with a draft amended legislation on June 1.
 
The effort would not be futile even if a different political formation assumes office. By and large, there is a policy continuum even if emphasis changes. The current NDA government took forward the goods and service tax, bankruptcy code and monetary policy framework (to name just three policies), on which work had been initiated by the previous government. Also, a new government would mean a change in personnel at the ministerial level and secretary level but most often the bulk of the bureaucracy isn’t changed immediately. They can be a source of readymade policy ideas for any new government.
 
Political capital for economic reform is highest in the first 12 months in office for any government, whether majority or minority. It must be used better than it has been in the past. Also, for all the mini-election cycles that will occur in the next five years, the incumbent central government must be strategic about using periods when the model code of conduct is in place to go through with the processes of policymaking. The substance must come before and after.
 
Time is money. An economy on the fast track cannot afford to waste it.
 

The author is chief economist, Vedanta