Finance Minister P Chidambram has exuded confidence that more reform measures would be announced in the coming days. Experts suggest that the options left with the government are in infrastructure sector and some other tricky issues like mining and land acquisition.
After the government announced revision in diesel prices and opened up sectors like multi-brand retail, power and aviation for foreign direct investment last week, Chidambaram had on Monday said that the government will be coming up with more reforms announcements in the next few weeks.
In terms of practical options, what the government can do is expediting the infrastructure projects while on the policy side reforms are expected on the power, coal and land fronts, said Madan Sabnavis of Care ratings.
Inter-ministerial differences should be sorted out as parliament is not in session, experts added.
On tax reforms front, economists are sure that the Goods and Services Tax will come only next year. Maximum, they say, the government can do is to announce a proper timeline for its implementation that will infuse some more confidence in the economy.
On revenue side, economists do not see options other than disinvestment and telecom spectrum auction. “It is difficult to increase tax revenues as economic activity is slow,” said D Joshi of Crisil.
On the expenditure side no curtailment is expected as fuel subsidies are already at the budgeted levels while the fall in fertiliser subsidy outgo, if at all any, will not be significant as the revival of monsoons will pull the fertiliser sales up for the rabi crop.
“Hopefully, the government should not cut the development expenditure for fiscal concerns,” Sabnavis added.
