New Delhi, May 21- The United Progressive Alliance has had enough. Fed up with the Opposition holding up legislation, the government has decided to adopt a combination of ordinances and policy rollouts to push economic reforms through. And it’s all going to happen in the next 60 days as part of Finance Minister P. Chidambaram’s big push to revive the economy in the run-up to the next elections.
According to reliable sources, the government will take the ordinance route for the appointment of a coal regulator on a priority basis. This is the government’s riposte to the coalgate fracas. The coal regulator’s mandate is to provide a formula for the pricing of coal, assess the quality of coal, etc. In the past there have been differences of opinion between companies sourcing coal from Coal India, saying that the quality is substandard and it wrecks their boilers. The coal regulator will now delve into all these issues.
The finance minister is ready to set up a railway tariff authority by means of an ordinance. The huge losses incurred by the railways may soon be a relic of the past. This authority will fix freight and passenger fares as well as determine track excess charges. From here on, the tariff regulator will fix prices and not the railways. Populism is fated to go the way of the steam engine.
Cabinet notes
Cabinet notes are being readied for some of the measures envisaged. For instance, to break the infrastructure logjam, an equity take-out scheme is to be unveiled whereby stressed companies can exit the road sector and be replaced by new, financially stronger companies. This is crucial as key road projects have been stalled because some companies executing projects are in a financial quagmire.
The idea is to stop talking and start showing tangible mechanisms to deal with the paralysis. The poor prognoses of rating agencies in recent times is driving this new formulation in part. Already, there is talk that Parliament’s Monsoon Session may well be postponed to early August instead of July 22. Chidambaram’s blitzkrieg plan is predicated on the need to push reforms proactively. The fear of over-regulation lingers, however. Department of Economic Affairs secretary Arvind Mayaram confirmed the developments. He told Mail Today, “Regulation is different from control. Regulation means less control, our plan is that this will unfetter the functioning in two vital areas of the economy – coal and railways – which are both bleeding. Our idea is to operationalise as quickly as possible.”
With less than a year to go for the general elections, the government cannot afford to sit back and let the BJP-led Opposition checkmate its plans to clear the bottlenecks in the infrastructure sector.
Sources said that an ordinance will be promulgated to set up the coal regulator as there are serious differences between the power companies such as NTPC and Coal India Ltd, the country’s largest coal supplier. This has been holding up the setting up of additional power capacity apart from introducing an air of uncertainty into the operations of existing power plants.
A senior official pointed out that as much as 60,000 MW of additional power capacity that had to be installed has got stuck due to shortage of coal. The issue of importing coal to meet the shortage will also be looked into, just as improved and speedy movement of domestic coal is being studied.
Job scam
The government has had to face major embarrassment over the jobs-for-cash scam and its perceived dillydallying over the sacking of Pawan Kumar Bansal from the railway minister’s post. It would now like to show that it is serious about revamping the operations of the cash-strapped railways.
Some of these reforms have already been announced as part of the finance minister’s budget speech and they will now quickly see the light of day.
