Agenda for Next PM

http://thinkindia.in.com/pm-agenda/

http://network18online.com/

http://thinkindia.in.com/


Let’s Change India

India is passing through an incredibly challenging period in its economic advance. If vital indicators are any sign of the health of the economy, India is ailing. Even the intellectual moorings of our economic crisis have been dislocated. Advocates of enlightened economic growth are painted as heartless elitists, baying for more wealth disparities. On the other hand, those who push for unsustainable doles are dressed up in saintliness. But that is

no reason to surrender to cynicism. We strongly believe that despite the tough global economic conditions, India can prosper if the right policy frameworks are put in to place quickly. We also believe that the growth versus inclusion debate is entirely concocted. Once we have growth, we must have inclusion and redistribution. The 2014 General Election is a pivotal moment in history. A dynamic new administration has an opportunity to revive the India story.

The realm of ideas is no monopoly of the Government. The country has a critical mass of experts; from academia, from think tanks and from the real world of practitioners; who can together be a formidable knowledge base. It is with this background that Think India embarked on its first project “Change India: An Agenda for the Next Prime Minister” for which we invited the finest minds from across the country to draw up an action plan for the person who will take over the reins of Government in May 2014. Often such ideas are expressed in theory and academic pos-tulates – but we have taken care to extract Action Points, so that the Next Prime Minister can hit the ground running. We have eschewed the temptation to use complex prose – instead, the Stra-tegic Policy Agenda will be presented in easy to understand “bullets”, supported by case studies and illustrations, that can, given political focus and will, be implemented.

The inspiration for Change India is drawn from Heritage Foundation’s Mandate for Leadership. Over three decades ago, in the run up to the US Presidential Election of 1980, the Heritage Foun-dation, one of America’s top conservative think tanks, drew up a comprehensive policy agenda for the next President. Though the agenda was based on centre-right economics, Heritage reached out to the presidential campaigns of both Ronald Reagan and Jimmy Carter. Only the Reagan campaign responded. When Ronald Reagan was inaugurated as President of the United States in January 1981 one of his first acts was to distribute copies of the Mandate for Leadership to members of his Cabinet. It was to become the blueprint for reform in America, an architecture which redefined and enriched America’s fortunes in the coming decades.

Like the Mandate for Leadership, Change India leans on the side of free market economics and small government. Its potential throttled by the visible hand of the Government, India needs a dose of radical reform. Our 140 point action programme that straddles 14 policy domains, with contributions from over 50 expert minds, is not written for any political party. We would only be delighted to share it with any interested political party, whatever its colour in India’s rainbow political spectrum.

India needs to move beyond the bitter partisanship of party politics to evolve an agenda that would serve the best interests of its 1.2 billion people. Our Agenda for Next Prime Minister is a small contribution to this exercise. In the hands of an able Government, it could be a really big idea, a potent weapon, something which could Change India.

Dhiraj NayyarCEO, Think India Foundation

Raghav BahlFounder, Think India Foundation, & Founder and Editor, Network 18




List of ExpertsADMINISTRATIVE REFORM &

CORRUPTION

Kiran Bedi was India’s first woman officer to join the Indian Police Service. She has worked with the United Nations as the Police Advisor to the Secretary General, in the Department of Peace Keeping Operations. She has represented India in International forums on crime prevention, drug abuse, police and prison reforms and women’s issues. Kiran Bedi is a recipient of the prestigious Ramon Magsaysay award. She is also the founder of two NGOs, Navjyoti and India Vision Foundation.

Kiran Bedi

Rajesh Tandon is the founder President for Participatory Research in Asia (PRIA), a voluntary organization that provides support to grassroots initiatives in South Asia. Rajesh’s research and advocacy initiatives straddle the issues of safe workplace, right to know, citizen leadership, accountable local self-governance, global solidarity and responsive civil society in India, South Asia and beyond.

Rajesh Tandon

ADMINISTRATIVE REFORM

K T S Tulsi is a leading Supreme Court lawyer, a veteran Public Prosecutor and a former Additional Solicitor General of India. Tulsi enrolled as a lawyer in Punjab after taking a law degree in 1971 but he decided to focus on the criminal side in the 80s. He has widely represented government, a host of eminent individuals and organizations before various Courts of Law in India and abroad. Tulsi has also written extensively on criminal law, patent law and human rights law.

K T S Tulsi


MR Madhavan co-founded PRS Legislative Research and is currently its President. Madhavan was earlier based in Singapore covering currency and interest rate markets as Principal and Senior Strategist for Bank of America. He has also worked with ICICI Securities in the equity research group and later headed interest rates research. He is a Fellow (doctorate) from IIM Calcutta, MBA from IIM Calcutta and holds a B. Tech degree from IIT Madras

MR Madhavan


TSR Subramanian is a founder member and present Chancellor of the Shiv Nadar University. Subramanian made remarkable attempts at administrative reforms during his tenure as Cabinet Secretary that includes the first draft of the Right to Information Act, steps for bringing in transparency in Government activities etc. He has held several key positions in the Ministry of Commerce and Agriculture and in the Government of Uttar Pradesh. Subramanian holds a Master’s degree in Public Administration from Harvard University.

TSR Subramanian

ADMINISTRATIVE REFORM & HEALTH

Ajay Jakhar is the Chairman of Bharat Krishak Samaj (Indian Farmers Forum), a non-partisan farmers’ advocacy group. Ajay is also a citrus and cotton farmer from Punjab who is passionate about farmer prosperity and choices. He vociferously advocates the use of technology in combination with traditional practices to maximise agricultural output.

Ajay Vir Jakhar

AGRICULTURE

Vivian Fernandes is a journalist with 28 years of practice, 18 of them in television - and TV18 Broadcast. For many years he was editor, economic policy with CNBC-TV18. His last assignment was as Executive Editor of Network 18 founder, Raghav Bahl’s book on India and China. Vivian takes a keen interest in agricultural policy and governance issues.

Vivian Fernandes

AGRICULTURE

Yoginder Alagh is a noted economist and the Chancellor of the Central University of Gujarat. A former Union Cabinet Minister, he also served as the Chairman of Institute of Rural Management Anand. Earlier, Alagh taught Economics at University of Rajasthan, Indian Institute of Management Calcutta and University of Pennsylvania. He also served as the member of the Planning Commission and Vice-Chancellor of Jawaharlal Nehru University, New Delhi.

Yoginder Alagh

AGRICULTURE

Nitin Puri is President Food & Agriculture Strategy at Yes Bank. Nitin also served as Vice President of Product Knowledge Management at Multi Commodity Exchange of India Limited. He has extensive experience in the Agribusiness industry, across the value chain in the areas of Commodity Trading, Supply Chain & Food Retail, with Companies like ITC Ltd., Reliance Retail & Aditya Birla Nuvo Ltd.

Nitin Puri

AGRICULTURE

Mahesh N Buch, is Chairman of National Centre for Human Settlements and Environment, a nodal institution of consumer protection in Madhya Pradesh. A former bureaucrat, Buch was awarded Padma Bhushan Award 2011, in recognition of his distinguished service of high order in the field of Civil Services. He has also won the UNEP award for implementation of desertification control programme in 1994-95. His main areas of concern are town and country planning, housing, afforestation and environmental protection.

Mahesh N. Buch

ADMINISTRATIVE REFORM &CORRUPTION





Parth Shah is founder President of the Centre for Civil Society. Parth’s research and advocacy work focus on issues of economic freedom, choice and competition in education, environment and good governance. He has published extensively in international and Indian journals. His edited books include Morality of Markets, Friedman on India, Profiles in Courage: Dissent on Indian Socialism. He holds a PhD in Economics from Auburn University, and taught at the University of Michigan.

Parth Shah

Atanu Dey is an economist who focuses on India’s path to prosperity from under-development. In his book Transforming India and on his blogs, he explores how India can achieve its potential. Atanu attended IIT Kanpur, Rutgers University and received his Ph.D in Economics from University of California at Berkeley. As a Reuters Fellow at Stanford University, he authored a model for catalyzing rural economic development called RISC. Atanu lives in San Francisco Bay area and works with Niti Digital in Mumbai.

Atanu Dey

EDUCATION

Chief Operating Officer of a prominent think tank- Centre of Civil Society, Harsh Srivastava was previously Chief Executive Officer of the World Development Forum. Before that Harsh worked for the Planning Commission as its Consultant (Planning). He has held senior posts in Reliance Capital, Feedback Infrastructure, and the Confederation of Indian Industry. Harsh has also been a journalist and co-written India’s first book on Corporate Social Responsibility.

Harsh Srivastava

EDUCATION

Ashish Dhawan is the Founder and CEO of Central Square Foundation (CSF). He worked for twenty years in the investment management business and ran one of India’s leading private equity funds, ChrysCapital. In June 2012, he left his full time role at ChrysCapital to start CSF. Ashish is an MBA with distinction from Harvard University and a dual bachelor’s (BS/BA) holder with Magna Cum Laude honours from Yale University.

Ashish Dhawan

EDUCATION

S Gopalakrishnan, popularly known as Kris Gopalakrishnan, is the Executive Vice Chairman of Infosys. Kris, along with N.R. Narayana Murthy and five others, founded Infosys in 1981. Recognized as a global business and technology thought leader, Kris was awarded the Padma Bhushan in 2011. He was also selected as one of the winners of the 2nd Asian Corporate Director Recognition Awards by Corporate Governance Asia in 2011. Kris was appointed as a member of the reconstituted United Nations Global Compact Board in 2012.

S. Gopalakrishnan

EDUCATION

Madhav Chavan is a co-founder and CEO-President of Pratham, an organization that has been recognized by the Kravis Prize and the Skoll Award, for its contribution as a social entrepreneurial organization in education. Chavan was awarded the WISE Prize for Education instituted by the Qatar Foundation at the World Innovation Summit for Education. He holds a Ph. D. in Chemistry from the Ohio State University and completed his post-doctoral work at the University of Houston.

Madhav Chavan

EDUCATION

Manish Sabharwal is co-founder and Chairman of TeamLease Services, which has placed more than half a million people in temporary and permanent jobs, since its inception in 2002. Sabharwal had earlier headed India Life, a business process outsourcing firm in the field of human resources. Sabharwal has a management degree from Wharton.

Manish Sabharwal

EDUCATION

EDUCATION & HEALTH

Dr. Arunabha Ghosh is CEO of the Council on Energy, Environment and Water (CEEW), an independent, policy research institution. With experience in more than thirty countries, Arunabha’s work intersects international relations, global governance and human development, including climate, energy, water, trade and conflict. He advises governments, industry and civil society on energy and resources security; renewable energy policy; water governance and institutions; climate governance (financing, R&D, geoengineering); energy-trade-climate linkages; and international regime design.

Arunabha Ghosh

ENERGY

Gurcharan Das is a well-known author, commentator and former CEO of Procter & Gamble India. He writes regular column for the Times of India and other Indian language papers and occasional pieces for the Wall Street Journal, Financial Times, and Time magazine. He is the author of India Grows at Night and The Difficulty of Being Good among other publications. Das is a member of international advisory boards of Wal-Mat and 500 fortune companies.

Gurcharan Das

CORRUPTION

Dipankar Gupta is a distinguished Professor and the Director of Centre of Political Affairs and Critical Theory, at the Shiv Nadar University. A former Jawaharlal Nehru University Professor, Dipankar has published nearly 70 research papers and won several awards for his academic contributions. He was the editor of the prestigious journal “Contributions to Indian Sociology”. Prof Gupta serves as a member of several boards like RBI, NABARD, National Standards Broadcasting Authority, Punjab Governance Reforms Commission and the Doon School. He was also a member of National Security Advisory Board from 2008-2010.

Dipankar Gupta

CORRUPTION




Shakti Sinha, a former IAS officer served as the Finance Secretary in Delhi Government. Mr. Sinha has been a Visiting Senior Fellow on Economic Development, with the Government of Bihar, India. From January 2000 to June 2004, he served as a Senior Advisor to the Executive Director on the Board of the World Bank. From March 1998 to November 1999, he also served as the Private Secretary to the Prime Minister of India.

Shakti Sinha

ENERGY

Percy S.Mistry is Chairman and CEO of Oxford International Associates Ltd. a UK registered private unlisted company that specialises in advisory services to governments and transnational companies. He is also a Director of the JP Morgan Emerging Markets Investment Trust. He was a Director and Senior Financial Advisor at the World Bank, an institution he was associated with between 1971 and 1986. In 2008, he was Chairman of a High Level Government Committee on making Mumbai an international financial centre.

Pecry S Mistry

FINANCIAL MARKETS & TAXATION

Ajay Shah studied at IIT, Bombay and USC, Los Angeles. He has held positions at the Centre for Monitoring Indian Economy (Mumbai), Indira Gandhi Institute for Development Research (Bombay) and the Ministry of Finance, and now works at NIPFP. His research interests include policy issues on Indian economic growth, open economy macroeconomics, public finance, financial economics and pensions.

Ajay Shah

FINANCIAL MARKETS

Rama V Baru is Professor at the Centre of Social Medicine and Community Health at the Jawaharlal Nehru University, New Delhi. Her major areas of research interest include commercialization of health services, infectious diseases, comparative health systems and health inequalities. She is the author of two books- Private Health Care in India: Social Characteristics and Trends and School Health Services in India: The Social and Economic Contexts. She also has publications in journals and edited volumes.

Rama V Baru

HEALTH

Dr. Ashwini Kumar Setia is a senior gastroenterology consultant with Max Healthcare. He has keen interest in issues related to public health.

Ashwini Kumar Setia

HEALTH

Dr Kirit Parikh is former Member of Planning Commission and Chairman, Integrated Research and Action for Development. He has also served as the Director of Indira Gandhi Institute of Development Research (IGIDR). He was the Chairman of the Integrated Energy Policy Committee, Planning Commission. He was a Member of the Economic Advisory Council (EAC) of the Prime Ministers of India. In the past he had also been a member of the National Committee for Environmental Planning & Co-ordination, the National Committee on Science and Technology and the Fuel Policy Committee.

Kirit Parikh

ENERGY

Dr. RK Pachauri is an internationally recognized on environmental and energy issues and their policy dimensions. He is an economist and industrial engineer by training and has held numerous academic posts in addition to his work with TERI and IPCC. He has co-authored above 130 papers and 27 books, most of them about energy and environment.

R K Pachauri

ENERGY

Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change. A noted journalist-analyst, Shankkar specializes in the interface of politics and economics. He has reported and written extensively on the political economy of India. He majored in economics from Bombay University and has been a Wolfson Chevening Fellow at the Cambridge University.

Shankkar Aiyar

ENERGY & INVESTMENT

Anjali Nayyar is currently the Senior Vice President of Global Health Strategies. Bringing sixteen years of international health experience to GHS, Anjali Nayyar oversees the firm’s work in India and other emerging markets. Anjali most recently worked with the International AIDS Vaccine Initiative (IAVI) for six years, where she served initially as India Country Director for three years and then as Vice President for Country and Regional Programs, working both in New Delhi and in New York at the organization’s headquarters. As Vice President, she led field operations and non-research and development programs in India, Brazil, South Africa, China, Kenya, Rwanda and Uganda. In addition, she led the strategic development and management of IAVI’s Vaccine Preparedness Unit.

Anjali Nayyar

HEALTH

Rashesh Shah, Chairman and CEO of the Edelweiss Group has over 20 years of experience in financial services in India. Prior to founding Edelweiss, he worked with ICICI, then India’s premier industrial development bank and today its largest private sector bank. Rashesh has served on the Boards of various companies and Public Institutions. He has in the past served on the Executive Committee of the National Stock Exchange.

Rashesh Shah

FINANCIAL MARKETS





Business leader, organisation builder, adviser and mentor, Sanjeev Aga’s career has traversed 40 years, and sectors from consumer and services, entertainment and light engineering, to telecommunications. Sanjeev Aga has, under his belt, 20 years as CEO and Managing Director, of Blow Plast / VIP Industries, of Aditya Birla Nuvo, and of Idea Cellular.

Sanjiv Aga

INFRASTRUCTURE

Shailesh Pathak, a former IAS officer, has been the President of Corporate Strategy at SREI Infrastructure Finance Limited since December 15, 2010. He was previously employed at Europa Capital and served as Managing Director at Principle Europa Indian Infrastructure Fund. Mr. Pathak served as a Senior Director of Investments at ICICI Venture. Previously, he was the Head-PPP at IDFC.

Shailesh Pathak

INFRASTRUCTURE

Lalit Mansingh has served as India’s Foreign Secretary, Ambassador to the United States and High Commissioner to the United Kingdom. Mansingh is the Chairman of FICCI-India US Policy Group and President of the World Cultural Forum (India). He has held several key positions including Prof Emeritus at the Foreign Service Institute of India, Executive Committee Member for the Institute of Peace and Conflict Studies. Ambassador Mansingh has previously taught at the Utkal University in Orissa.

Lalit Mansingh

FOREIGN POLICY

Commodore (retd) C Uday Bhaskar, former Director IDSA, New Delhi retired from the Indian Navy in early 2007 after 37 years service. He was the Director of the National Maritime Foundation form Jul 2009 till Jul 2011. He has edited books on nuclear and international security related issues and has contributed over 60 research articles to journals in India and abroad. Cmde Bhaskar is also a columnist for Reuters and the Dainik Jagran.

C. Uday Bhaskar

FOREIGN POLICY

PP Shukla joined the Indian Foreign Service in 1974 and has served in Moscow, Brussels, London and Kathmandu, among other places. He was the Diplomatic Adviser to the Prime Minister from 1996 to 2000. Currently, he is the joint director of the Vivekanand International Foundation, a New Delhi-based think tank set up with the collaborative efforts of India’s leading security experts, diplomats, industrialists and philanthropists.

Prabhat Prakash Shukla

FOREIGN POLICY

Vivek Katju was an Indian Foreign Service officer of the 1975 batch. He served as India’s ambassador to Afghanistan, Myanmar and Thailand. He last assignment in Government was in the crucial position of Secretary (West) in the Ministry of External Affairs. Ambassador Katju was one of India’s chief negotiators during the Kandahar hijack when he headed the Pakistan-Afghanistan_iran desk at the Ministry of External Affairs.

Vivek Katju

FOREIGN POLICY

Dr. Rajiv Lall is the Executive Chairman of IDFC. He has about three decades of experience with leading global investment banks, multilateral agencies and in academia. His areas of expertise include project finance, private equity/ venture capital, international capital markets, trade, infrastructure and macroeconomic policy issues with a focus on emerging markets including India and China in particular.

Rajiv Lall

INFRASTRUCTURE

Srivatsa Krishna, topped the National Civil Services Examination in 1994, was awarded President of India’s Gold Medal and joined the Indian Administrative Service. He was part of the leadership team which pioneered E-governance in India and created one of Asia’s largest IT and investment clusters, Cyberabad, which has been globally acclaimed by Goldman Sachs, Businessweek, The Economist, and TIME as a marvel of Modern India. World Economic Forum at Davos also honoured him as one of its Top 100 Young Global Leaders for Tomorrow in Davos in 2003.

Srivatsa Krishna

INFRASTRUCTURE

Vinayak Chatterjee co-founded Feedback Infra in 1990 and continues to serve as its Chairman. He is a strategic advisor to leading Indian companies, the Government of India, the Ministry of Finance, State Governments, as well as multilateral and bilateral institutions in the areas of infrastructure planning and implementation. He is one of the leading proponents of the Public-Private Partnership (PPP) model for developing India’s infrastructure. He is the Chairman of the Confederation of Indian Industry’s (CII) National Task Force on Infrastructure Projects – Monitoring & Advocacy.

Vinayak Chatterjee

INFRASTRUCTURE

Bibek Debroy is Professor at the Centre for Policy Research in New Delhi. A well-known economist, he has served as the Consultant to the Department of Economic Affairs, Ministry of Finance, Government of India. Bibek has authored several books, papers and popular articles. He is also the Consulting Editor of some of the most prominent financial newspapers.

Bibek Debroy

INVESTMENT & MANUFACTURING




Manish Chokhani served as the Managing Director and Chief Executive Officer of Axis Capital Limited until November 2013. Prior to this, Mr. Chokhani was the Managing Director and Chief Executive Officer at Enam Securities. He also served as a Director of Axis Capital Limited and Enam Securities Pvt. Ltd.

Manish Chokhani

INVESTMENT

Saugata Bhattacharya is senior Vice-President, Business and Chief Economist of Axis Bank. He was a member the Finance Ministry Sub-Group on Estimating Foreign Savings for the approach paper for 12th five year plan. He was previously with Unilever in India and the Infrastructure Development Finance Company (IDFC). He was educated at Delhi School of Economics and Oxford University.

Saugata Bhattacharya

INVESTMENT

Kiran Mazumdar Shaw is the Chairman and Managing Director of Biocon, a biotech company and Asia’s largest insulin maker. She is a first generation entrepreneur with more than 36 years experience in biotechnology and industrial enzymes. She was awarded the Padma Bhushan, India’s third highest civilian award for her pioneering efforts in biotechnology. Shaw originally trained to become a brewer in Australia.

Kiran Mazumdar Shaw

MANUFACTURING

Rajesh Chakrabarti is Clinical Associate Professor of Public Policy and Executive Director, Bharti Institute of Public Policy, at the Mohali Campus of Indian School of Business. Rajesh is a fellow of the Wharton Financial Institutions Center and also a member of the Academic Panel of the International Centre for Financial Regulation, London. He is a regular columnist for the Financial Express. Rajesh has authored three books including Grit, Guts and Gumption and published several articles in top Finance, Economics and Management journals.

Rajesh Chakrabarti

MANUFACTURING

Rajiv Kumar is an economist and Senior Fellow at the Centre for Policy Research. Earlier, he was the Secretary General of the Federation of Indian Chambers of Commerce and Industry. Rajiv was also Director and Chief Executive of the Indian Council for Research on International Economic Relations (ICRIER), one of India’s top economic policy think tanks. He has served as a member of the National Security Advisory Board for 2006-2008.

Rajiv Kumar

MANUFACTURING

RC Bhargava is Chairman of Maruti Suzuki India Ltd. Bhargava Joined Maruti in 1981, almost immediately after its incorporation, as its Marketing Director. A former IAS officer, Bhargava has also served as the President and CEO of RCB Consulting Private Limited, a premier management and human resource consultancy firm. Before joining Maruti, Bhargava was Director (Commercial) of Bharat Heavy Electricals Limited in 1979-80.

RC Bhargava

MANUFACTURING

Anuradha Dutt is an eminent lawyer and is presently engaged in legal practice in the High Court and Supreme Court with over 26 years of experience in the area of Corporate Laws. She has represented Vodafone case since 2008.

Anuradha Dutt

TAXATION

An Indian Revenue Service officer, Mr. BM Singh served as the chairman of Central Board for Direct Taxes in 2007.

BM Singh

TAXATION

Ketan Dalal joined PricewaterhouseCoopers in 2007, with the merger of RSM and took on the role of Joint Tax Leader in 2009. He has over 30 years of experience and is an expert in cross-border tax issues, investment structuring, including mergers and acquisitions. Besides advising top multinational clients, Ketan has authored on books on tax and regulatory issues. He is a member of the Institute of Chartered Accountants of India.

Ketan Dalal

TAXATION

Ashima Goyal is Professor of Economics at Indira Gandhi Institute for Development Research in Mumbai. Her research interests are in open economy macroeconomics, international finance, institutional economics and development economics. Ashima is the author of many national and international publications, and a book on Developing Economy Macroeconomics. She is also editor of a Routledge journal in Macroeconomics and International Finance. Her research has received many national and international awards.

Ashima Goyal

TAXATION & TWIN DEFICITS

M. Govinda Rao is a former Director of National Institute of Public Finance and Policy. Besides being a Member of the Economic Advisory Council to the Prime Minister, he has served on several advisory panels such as Member, Expert Committee on Multilevel Planning, Planning Commission. Rao’s research interests include public finance and fiscal policy, fiscal federalism, and state and local finance. He has been a consultant to the World Bank, International Monetary Fund, Asian Development Bank, and the UNDP.

M. Govinda Rao

TAXATION





Mukesh Bhutani is Managing Partner of BMR Legal and non-executive Chairman of the firm. With a specialisation in corporate international tax and transfer pricing, Mukesh has over 30 years’ experience in advising Fortune 500 multinationals and Indian business houses on a wide range of matters relating to FDI policy, entry strategy, business re-organisations, cross-border tax structuring, tax controversy and regulatory policy across a range of sectors.

Mukesh Bhutani

TAXATION

Dr. Arvind Virmani is president of the non-profit organization Chintan and non-resident senior fellow in the Global Economy and Development program. Previously, he served as chief economic advisor to the Indian government and executive director of the International Monetary Fund. His research focuses on the Indian economy, policies for growth, economic development and global governance.

Arvind Virmani

TWIN DEFICITS

Jaithirth Rao, popularly known as Jerry Rao, is Executive Chairman of Value and Budget Housing Corporation (VBHC), an affordable housing venture. Rao, also serves as Venture Advisor at New Enterprise Associates (India) Pvt. Ltd. Rao was the Founder, Chairman and Chief Executive Officer of Mphasis Ltd. He has served as the Chairman of India’s National Association of Software and Service Companies – NASSCOM. He is a veteran in consumer and corporate financial services and in technology management.

Jerry Rao

URBANISATION AND HOUSING

Surjit S. Bhalla is the Chairman of Oxus Investments. He has worked as a research economist at Rand Corporation, Brookings Institution, World Bank and The Policy Group. He has also served on several committees of the Government of India and was an appointed member of the National Statistical Commission of India (2007-2009). Surjit Bhalla has published several academic articles. He is also the author of four books on globalization and its effects on the world economy.

Surjit S. Bhalla

TWIN DEFICITS

R Jagannathan, Jaggi to colleagues, is currently Editor-in-Chief of Forbes India, Firstpost.com, and some web and print publications of the Network18 Group. With a journalistic career spanning more than 37 years, he has held senior editorial positions in business and general publications, including national dailies and magazines. He has been Editor or Executive Editor of DNA, Financial Express, Business Standard, and Business World. He was the founding Executive Editor of Business Today in the early 1990s and Business Editor of India Today before that.

R Jagannathan


Shailaja Chandra, before being appointed as the Chairman, Public Grievances Commission on her retirement, was the Chief Secretary of the Government of National Capital Territory of Delhi. She has held various positions in the Government of India in the Health, Power and Defence Sectors for 15 years. In 2006 she was appointed as the first Executive Director of the National Population Stabilisation Fund, Government of India.

Shailaja Chandra


T.V. Mohandas Pai is the Chairperson of the Board of Manipal Global Education Services Private Limited and Advisor to the Manipal Education and Medical Group. Pai was a member of the Board at Infosys Limited, Bangalore where he headed Human Resources, Education & Research and Administration until 2011. Pai has also served as a member of several committees constituted by the Government of India, the Reserve Bank of India and the Securities and Exchange Board of India (SEBI).

T.V. Mohandas Pai





1. ADMINISTRATIVE REFORM

2. AGRICULTURE

3. CORRUPTION

4. EDUCATION AND SKILLS

5. ENERGY

6. FINANCIAL MARKETS

7. FOREIGN POLICY

8. HEALTH

9. INFRASTRUCTURE

10. INVESTMENT

11. MANUFACTURING

12. TAXATION

13. TWIN DEFICITS (FISCAL DEFICIT AND CURRENT ACCOUNT DEFICIT)

14. URBANISATION AND HOUSING

The 14 agendas





EXECUTIVE SUMMARY




1. ADMINISTRATIVE REFORM1. In civil services, end seniority principle for promotion; Encourage lateral entry

2. Appointments to all constitutional, statutory and regulatory authorities should be done in a bipartisan fashion by the Prime Minister and Leader of the Opposition

3. Abolish wasteful ministries/departments; Make structures of remaining ministries lean and efficient

4. Set time limits for bureaucratic decisions; Upload decision-making details online

5. Modernize the Police Station: Upload FIRs on a website; Interrogation rooms to have video and audio recording

6. Fixed Tenures for critical ranks like DGPs, District SPs & SHOs; Transfers of officers up to SP rank to be independent of political executive

7. Abolish the collegium system of appointments of judges; Enforce judicial accountability through audit

8. Set time limits for judicial decisions; Government should reduce its litigation in the courts system

9. Abolish the anti-defection law for all Parliamentary votes except Money Bills and Confidence Votes

10. Strengthen the Parliamentary Committee system; Make hearings public, broadcast on television

2. AGRICULTURE1. Abolish Minimum Support Prices: Move to Income Support

2. Announce a moratorium on export bans and futures trading bans

3. Invest in seed technology: Allow GM Brinjal

4. Amend Food Security Bill; reduce coverage; the move to cash transfers

5. Provide the financial resources for an agriculture extension officer in each district

6. Abolish the Agriculture Produce Market Committee (APMC) Act

7. Allow farmers to manage irrigation distribution projects

8. Aid diversification to allied activities; Horticulture, Poultry, Fisheries & Animal Husbandry

9. Institute a National Agriculture Insurance

10. Encourage Mechanization, leasing through cooperatives





3. CORRUPTION1. Strong Lokpal, independent from executive but accountable to Parliament

2. All welfare programmes should be converted to cash transfers based on Aadhaar smart cards

3. When awarding contracts for natural monopolies— mining, oil and gas, telecom spectrum — the answer is a transparent auction

4. For land transactions, equalize circle rates with market rates

5. Enforce transparency in electoral funding

6. All government departments must be required to place all their rules, procedures and forms on their website; queries (precede)

7. Minimise requirement for Affidavits and let self-attestation of affidavits become the norm rather than the exception

8. Set a time limit for adjudicating judicial cases

9. Prescribe time limits for key bureaucratic decisions and impose stiff penalties for not keeping information systems up to date

10. Leverage the reach of mobile phones to enforce transparency and accountability on Government

4. EDUCATION AND SKILLS1. Permit for-profit institutions at all levels

2. Move to Vouchers; reduce direct spending on government schools

3: Standardise Assessments: ensure every child is learning in school

4. Promote continuous teacher training so that they are in touch with the developments in the field and well-versed with the use of technology

5. Institute a new independent Higher Education regulator

6. Deregulate Distance and Online Higher Education

7. Allow foreign universities to set up campuses

8. Raise fees at Government-funded Universities

9. Remove apartheid between Education and Training; NVEQF, Vocational Universities, Community Colleges

10. Reboot the Apprenticeship Act of 1961




5. ENERGY1. Create a new ministry of energy by integrating the ministries of petroleum & natural gas,

power, new and renewable energy, coal and the Nuclear Power Corporation

2. Every unit of fuel and every unit of energy should command a market price: subsidise the poor through direct cash transfers

3. End Coal India’s monopoly over the mining of coal; Allow domestic and foreign investors to mine coal and sell in the open market

4. Give complete autonomy to energy PSUs like ONGC, IOC, NTPC; Begin the process of privatization via a National Shareholding

Trust accountable to Parliament

5. Set strict time limits for environment clearances for mining and energy projects

6. Corporatise and merge state electricity discoms into a single national entity

7. Create a cross-border energy grid: tap the hydro-power potential of neighbouring countries

8. Create ready-to-dig opportunities for exploration companies

9. Upgrade the Solar Energy Mission: target 30,000 MW instead of current 20,000 MW capacity in ten years; Encourage wind-based power

10. Address the demand side to encourage energy efficiency: make the GRIHA system of rating buildings mandatory; Impose higher taxes on

energy inefficient household appliances and motor vehicles

6. FINANCIAL MARKETS1. Make RBI a constitutional body independent from Finance Ministry;

interest rates should be determined by a monetary policy committee

2. Abolish Forwards Markets Commission; Bring commodities exchanges under SEBI preview

3. Liberalise the banking market by removing all barriers to foreign investment and privatizing state-owned banks

4. Allow 52 percent FDI in insurance; privatize government-owned insurance companies

5. Liberalise pensions markets: Allow 51 percent investment by foreign pension fund manager

6. Liberalise corporate bond market: integrate it with currency and derivatives markets

7. Open up the derivatives market by ending RBI and Finance Ministry controls





to provide for investment risk-hedging

8. Restore macroeconomic balance: Commit to a reduced fiscal deficit of 3 percent of GDP in 36 months

9. Permit full convertibility of rupee on the capital account

10. Implement recommendations of the Financial Sector Legislative Reforms Commission which streamlines and harmonises the

legal framework for Indian financial markets

7. FOREIGN POLICY1. Over 5 years, increase capital expenditure on defence from

1.1 percent of GDP to 3 percent of GDP

2. Expand Indian Foreign Service: allow lateral entry; Encourage specialization in economic issues

3. Restructure the intelligence agencies: increase coordination between agencies and make them accountable to Parliament

4. Act tough with Pakistan: revive covert operations ability; Create economic deterrents; Ask Pakistan to reduce its mission size in India

5. Aggressively expose Sino-Pakistan nexus in international forums like the UN and with countries like the US and UK

6. Bring Tibet into bilateral dialogue with China; Ask for Tibet’s historical independence

7. Invest heavily in roads along the China-India border

8. Sign defence pacts with China’s East Asian rivals; Begin with Vietnam

9. Regain lost influence in India’s neighbourhood; Adopt a carrot and stick approach

10. Revitalise the Indo- US relationship: forge common interests on Af-Pak region, Iran and on bilateral economic issues

8. HEALTH1. Double Government Expenditure on Health from just under 2 percent of GDP

to 4 percent of GDP in five years: Use additional funds innovatively

2. Create an incentive system for transfer of health-linked funds to states

3. Train a new category of para-doctors: college graduates with two years medical training who can treat basic diseases




4. Commitment to build an AIIMS-like super specialty teaching hospital in every state

5. Restructure Union Health Ministry: create a separate department manned by experts to focus on TB, Malaria and HIV the three biggest killer diseases in India

6. Restructure Government hospitals: contract out all non-core services (cleaning, security, canteens etc); in particularly dysfunctional hospitals

outsource entire management on a non-for-profit basis

7. The Medical Council of India should have a 24 hour help line for receiving complaints which must be uploaded on the web immediately

8. Set up designated consumer courts which deal only with cases of medical negligence and spurious drugs

9. Creation of independent Technology Assessment Boards for rational deployment, and use, of drugs and technology

10. Announce a Central Government programme to construct public toilets on a war footing

9. INFRASTRUCTURE1. Create a National Infrastructure Board (NIB) chaired by the Prime Minister

and co-chaired by the relevant Chief Minister

2. Separate policymaking and regulation; Set up independent sectoral regulators to monitor user fees and tariffs

3. Merge the ministries of Roads and Highways, Railways, Civil Aviation and Shipping into an integrated ministry of transport

4. Permit renegotiation/re-auctioning of PPP contracts

5. Enable easier finance for infrastructure: facilitate the development of a long term bond market, allow foreign pensions funds and private equity funds by amending

qualifications for investment in physical infrastructure

6. Restructure NHAI to convert it into ‘Mission Mode’; Upgrade Golden Quadrilateral from 6 lanes to 12 lanes

7. Corporatise Indian Railways; Abolish the Railway Board; Allow private operators to run trains, stations

8. Build a high-speed Rail Network; begin with routes plied by the Shatabdi Express trains

9. Build 50 new airports in big cities, Tier 2 and Tier 3 cities/towns; Abolish aviation fuel tax

10. Privatize major public sector ports





10. INVESTMENT1. A commitment to reduce the fiscal deficit and revenue deficit by 0.5 percent per year

2. Implement the Goods and Services Tax immediately

3. Issue a Pledge: In low and stable taxation and rule of law we believe

4. Privatise PSUs, Increase Public Investment with the proceeds

5. Remove FDI caps across the board; in select strategic sectors like defence, allow 24 percent domestic equity

6. Diversify domestic sources of capital: introduce competition in banking and develop bond markets

7. Decentralise Approvals: Allow a single window at the state level

8. Digitise processes related to registration and clearances; make time-bound clearances the norm rather than the exception

9. Revisit Public Private Partnerships: End the crony capitalism

10. Reform labour laws

11. MANUFACTURING1. Declare Manufacturing priority number one for Government:

Set up a Manufacturing Board chaired by PM

2. Set a target time limit for clearances: Should not exceed 125% of time taken in Singapore and China

3. End all tax concessions and other regulations that incentivize companies to remain SMEs

4. On labour laws, get rid of the Delhi influence and change the Seventh Schedule

5. Reform employment exchanges: outsource to private sector

6. Amend Land Acquisition Act: Eliminate need for multiple clearances; keep price principle intact

7. The cost of power and energy for industry should be no more than for any other sector: end cross subsidy of rest of economy by industry

8. End protection, and preferential treatment to manufacturing PSUs

9. Support firms that are innovators; strengthen IPR regime, give tax breaks for R&D

10. Fast track the commissioning of National Investment and Manufacturing Zones (NIMZs) and MSME Clusters




12. TAXATION1. For individuals, income tax bands and rates should be reset; with (a) no tax on

incomes below Rs 3 lakh per annum for income earners under the age of 65 and Rs 5 lakh per annum for pensioners, (b) 15% on the next Rs 3 lakh (c) 20% on the next Rs 6 lakh and

(d) 25% on income above Rs 12 lakh

2. Set a Corporate Profit Tax rate of 15% on profits of up to Rs 50 crore per annum and 25% on all sums above that amount. End all exemptions, except for exports.

3. To reinforce the need for all companies to derive a much greater amount of export income than they do now, a tax rebate of 5% should be provided on profits derived from

export income in addition to rebates on indirect taxes.

4. Amend Tax law to prevent future FMs from levying any surcharges/special levies on income or profits taxes for special purposes or to meet exigencies in revenue shortfalls.

If exigent revenue needs have to be met that should be achieved by adjustments of rates on indirect taxes (like Road taxes, Luxury goods taxes, GST when it’s implemented).

5. Introduce GST with no exemptions; set a low rate of 12 percent (Centre plus states)

6. Tax agricultural income at the same rates/slabs as income tax

7. Pledge that there will never be any retrospective change in tax laws

8. Reform tax administration: Allow tax scrutiny only with the permission of Revenue Secretary; Use modern technology to reduce interface between tax official and citizens

9. Reduce arrears and settle disputes through fast track courts or through out-of-court settlement.

10. Devolve some powers of taxation to local city Governments

13. TWIN DEFICITS (FISCAL DEFICIT AND CURRENT ACCOUNT DEFICIT)

1. Announce a cap on subsidies at 0.75 percent of GDP; Lay out a roadmap to achieve it in three years

2. Reduce the number of Centrally-Sponsored Schemes from 147 to 20. Each central ministry like HRD, Health, Urban Development, Rural Development should be permitted just one

programme; For instance, Rural Development should be allowed a consolidated NREGA only

3. Ask the Seventh Pay Commission to downsize significantly the lower bureaucracy at Class III and Class IV levels before recommending a raise in wages for the rest

4. Widen direct taxes base: Lower rates, end exemptions and tax agricultural income

5. Reform Indirect Taxes: Introduce Goods and Services Tax at the rate of 12 percent

6. Launch an aggressive privatization (not simply disinvestment) programme





7. End intervention in currency markets; Let rupee find its own level

8. Remove all barriers to foreign inflows, both FDI and FII

9. Diversify trade: look for Free Trade Areas with non-traditional and traditional partners

10. Address non-tariff barriers (in sectors like pharmaceuticals, media, agricultural commodities) which cause huge trade deficit with China

14. URBANISATION1. Launch an improved National Urban Renewal Mission scheme. The objective should be to double or nearly double investment in urban infrastructure from 0.7 percent of

GDP currently to 1.1-1.4 percent of GDP in five to seven years

2. Increase floor space index (FSI) in cities; at a minimum double existing limits

3. Permit charter cities which run to separate rules without state government interference

4. Allow city agencies to raise their own finances

5. Enforce public disclosure of all city government decisions

6. Redevelop slums for low-cost housing

7. Central and state public sector undertakings are some of the largest owners of land – Divest this land via auctions

8. In peri-urban and peri-metropolitan areas, ELIMINATE the need for “prior approval” to convert Agricultural land to Residential land.

9. Encourage affordable housing by eliminating stamp duty for small apartments (less than 600 sq feet) and by automating registration to eliminate transactions costs

10. Invest heavily in urban transport: every city with population over 1 million should have a metro









1. In civil services, end seniority principle for promotion; Encourage lateral entry

Strengths and Opportunities:

A. Several reviews of government’s functioning have pointed out the need for professionaliza-tion of recruitment process and performance reviews at all levels of central and state civil services.

B. Merit rather than seniority at the time of recruitment ought to be criteria for all promotions.C. Requirement of professional competencies at various levels of administration have become

complex; a large number of professionals are available and interested in working with the government.

Weaknesses and Threats:A. Entrenched bureaucracy and related political vested interests have resisted any significant

changes in the system so far.B. Poor performance culture pervades lower echelons of government which makes perform-

ance focused recruitment and promotion difficult.

How to get it done:A. Appoint 2-3 panels of professionals to operationalise the various recommendations of the

13th and 15th Report of Second Administrative Reforms Commissions as well as the Com-mittees set up by Department of Personnel and Training (DOPT), Government of India (GOI).

B. Appoint a professional team at the Department of Personnel and Training under a young professionally educated Minister to carry forward the reforms which reduce the tenure of all government functionaries to 20 years, with a selection process after 14 years of service, and introduce modern performance monitoring and reward systems.

C. Implement recommendations related to setting up of autonomous and independent Central and State Civil Services Authority, as per the above recommendations.

D. Create teams of similar professionals with each state government with time-bound man-dates to bring about such changes.

E. Bring contractual appointments at higher echelons of administration at the central and state levels to get competent professionals with domain expertise and managerial experiences.

F. Create public opinion for professionally functioning bureaucracy by introducing compul-sory social audits and client feedback for all aspects of government functioning.

Case Study: A. Professional recruitment and performance-based promotion systems have now been intro-

duced in many countries like Brazil, Philippines, Thailand and Malaysia (not to mention Canada, Australia and UK).

2. Appointments to all constitutional, statutory and regulatory authorities should be done in a bipartisan fashion

by the Prime Minister and Leader of the OppositionStrengths and Opportunities:

A. Proper functioning of government needs appropriate checks and balances. Appointments to constitutional and statutory bodies cannot be partisan choices of the incumbent government.

B. Proper functioning of markets needs a strong regulatory apparatus which is independent from the government and free from capture by special interests.

C. Certain bodies need specialised professionals to head them, not retired IAS officers.




Weaknesses and Threats:A. An incumbent government will be reluctant to part with control over crucial appointments.B. The bureaucracy, particularly IAS, will try and protect the existing system of spoils.

How to get it done:

A. All such appointments should be made by a two member committee comprising the Prime Minister and Leader of the Opposition.

B. All such appointees should be subject to an approval process by a relevant Parliamentary Committee which will have cross-party representation.

C. The search process for these positions should be extended beyond the entrenched bureaucracy to all other professions.

Case Study: A. In the US, all crucial executive appointments have to be cleared by the US Congress, and

not simply by Presidential diktat.

3. Abolish wasteful ministries/departments; Make structures of remaining ministries lean and efficient

Strengths and Opportunities:A. The task of implementation of major development programmes requires more professional

competencies, and the proliferation of ministries and departments at national and provincial levels has resulted in inefficiency and absence of coherence in developing and implement-ing policies.

B. Several ministries have created too many posts just to accommodate a gigantic and con-stantly proliferating bureaucracy. Posts should be rationalised.

C. The Government of India tends to be bottom heavy: too many personnel in non-productive Class III or IV jobs. That needs to change.

D. Some ministries set up when India was a socialist economy, should be abolished. There is no rationale for a Ministry of Steel; prices and quantities are fixed by the market.

E. Some ministries need consolidation. There should be one consolidated ministry for Trade and Industry, rather than separate ones for Commerce, Industrial Policy and Promotion, Heavy Enterprises, Micro, Small and Medium Enterprises.

Weaknesses and Threats:A. Vested political interests in implementation are deep-rooted, as legislators are more

interested in patronage to their own clients (party satraps, funders, voters etc) through contracts and tenders.

B. Competencies of administrative personnel are weak for the complex nature of policy-making and developmental challenges, but civil services (IAS in particular) have monopolised control of all key ministries and departments.

How to get it done:A. Follow recommendations of the Second Administrative Reforms Commission and

the National Commission for Reforming the Working of the Constitution; the Justice Venkatachalliah Commission submitted its recommendations to the Prime Minister in 2002 (http://lawmin.nic.in/ncrwc/ncrwcreport.htm) and the recommendations of the Second Administrative Reforms Commission were submitted to the Prime Minister in April 2009 (13th Report in particular).

B. The above recommendations define the roles of ministries of central government in five core functions, use of principles of subsidiarity for allocation of functions to state and local





governments and separation of policy-making from implementation responsibilities.C. One of the clear recommendations is to rationalise integration of ministries with groups of

themes (e.g. merge Ministry of Urban Development with Ministry of Urban Housing and Poverty Alleviation).

D. Create Directorates for Programme Implementation which are separated from the policy-making functions of ministries, staffed by professionals recruited from outside the civil services with fixed term tenures and accountability to Parliament and public.

E. Incentivise the top echelons of civil service to cooperate: bargain for big reductions in lower bureaucracy with some minor increases in elite cadres.

Case Study:A. The World Bank study quoted in the 13th ARC Report provides detailed examples from

Thailand, UK and other Commonwealth countries in this regard, with a methodology of reorganisation from the current system.

4. Set time limits for bureaucratic decisions; Upload decision-making details online

Strengths and Opportunities:A. Second ARC made a large number of recommendations in this regard and a variety of

Task forces have been recommending the need for simplification of procedures in the administration of central and state governments.

B. RTI and Service Guarantee Laws necessitate that processes, forms and storage systems for doing daily business of government are modernised and reformed to ensure speed, efficiency, cost effectiveness, transparency and accountability.

Weaknesses and Threats:A. Inertia and babudom’s penchant for precedence continues to frustrate attempts to reforms,

including unions in public services.B. Massive overhaul of rules of doing business and tendering/accounting systems appears

daunting; piecemeal changes introduced for out-sourcing various functions of the government too have not yielded any positive results.

How to get it done:A. Start with reforming business processes of PMO and larger national ministries along with

their restructuring and rationalisation with focus on outcomes, reducing the layers for the movement of files to maximum 3 and then overhaul Allocation of Business Rules and Manual of Office Procedures (as per the detailed recommendations of the 13th Report of Second ARC).

B. Keep Comptroller and Auditor General (CAG) and Central Vigilance Commission (CVC) on board to ensure compliance mechanisms, checks and balances and monitoring and reporting requirements.

C. Issue orders immediately and disseminate them publicly (on the web) on reforms undertaken—take the example of change in rupee denomination to the metric system decades ago.

D. Impose penalties on officers responsible for unnecessary delays in decision-making.

Case Studies: A. New Public Management systems have been introduced in large democracies two decades

ago; several state governments have made piecemeal changes in certain procedures which can be scaled up nationally

B. In Punjab, following the recommendations of a Governance Reforms Commission, there is




a greater e-governance and strong penalties on errant officials.

5. Modernize the Police Station: Upload FIRs on a website; Interrogation rooms to have video and audio recording

Strengths and Opportunities:A. It will help restore much of the lost credibility of the police.B. It will enforce accountability on the police.C. It will help the delivery of justice with more certainty and speed.

Weaknesses and Threats:A. Vested interests who want to exercise influence over police proceedings will resist.B. Arguments will be made on the huge costs involved in upgrading technology in every

police station in the country.

How to get it done:A. There should be automatic recording of all calls made to police stations.B. Audio-video technology is widely available and the Centre should fund the cost for

technology upgradation in all states.C. Use the web to ensure inter-connectivity of all police stations at the district, state and

national level.D. Ensure that 33 percent of staff in all police stations is female.E. Upgrade forensic techniques to global best standards.

Case Studies:A. Law enforcement's use of audio-video technology in American criminal justice system

ranges from documenting police field stops of suspects and their interrogations in station house interview rooms.

B. Police forces like the Guardia Civil in Spain and An Garda Siochana in Ireland were early technology adopters and now benefit from some of the most efficient police operations and investigative systems in the world.

C. The Hong Kong Police Force is the world’s second and Asia’s first police agency to operate with a modern policing system.

6. Fixed Tenures for critical ranks like DGPs, District SPs & SHOs; Transfers of officers up to SP rank

to be independent of political executiveStrengths and Opportunities:

A. It will reduce political interference in the functioning of the police.B. It will boost the morale of upright officers who otherwise fear arbitrary transfers.C. Law and order will be maintained more effectively.

Weaknesses and Threats:A. It could, in cases, entrench an inefficient or corrupt official in a particular job.B. It will be resisted by politicians.

How to get it done:A. Begin my amending the rules for the All India Service, IPS.





B. Set the standard in Union Territories.C. Persuade CMs to implement.

Case Studies:A. Ottawa Police Service has a Tenure Policy in place which is reviewed regularly. The desired

outcome of the Tenure program is that it provides a greater number of opportunities for officers to gain operational experience, while increasing the officer experience on patrol.

B. The position of FBI Director has a fixed 10-year term, and the office holder cannot be reappointed, unless Congress acts to allow a second appointment of the incumbent. There are no statutory conditions on the American President’s authority to remove the FBI Director. One Director has been removed by the President since 1972.

7. Abolish the collegium system of appointments of judges; Enforce judicial accountability through audit

Strengths and Opportunities:A. Judiciary cannot be run like a closed house; accountability needs to be enforced.B. Judicial system is slow and corrupt; these measures could alter it radically.C. The efficient delivery of justice will take centre-stage.

Weaknesses and Threats:A. The higher judiciary will resist executive interference.B. There is a danger of the executive establishing too much control over the judiciary:

independence of judiciary critical.How to get it done:

A. All senior judicial appointments to be made by a National Judicial Commission, which will contain representatives from judiciary, executive, legislature and civil society.

B. The CAG can be asked to audit the performance of various courts in the country.C. All performance audits of judiciary should be publicly available on the internet.

Case Studies:A. The Judges in some regions of the United States (such as Alaska, Arizona, Colorado and

Utah) are appointed by popular vote for a fixed term. Special agencies have been created to assess the professional performance of judges who stand for re-election by holding opinion polls among lawyers, jurists and citizens acquainted with their judicial conduct.

B. In Austria and France, judges are periodically evaluated at regular intervals that vary from two to five years. Such appraisals are subsequently taken into account for promotions, to choose among the more qualified ones and fill the vacancies.

8. Set time limits for judicial decisions; Government should reduce its litigation in the courts system

Strengths and Opportunities:A. Judicial delay is a big source of corruption.B. Citizens’ faith in justice system needs to be restored.C. Government is the biggest litigant in the country: almost 65 percent of cases in the country’s

courts involve the government as litigant.




Weaknesses and Threats:A. For some complicated cases, strict time limits may be counter-productive.B. Government has no incentive not to litigate and go into appeals in lost cases.

How to get it done:A. Set benchmarks (timelines) for different types of cases. Any time overrun should require a

detailed explanation from the concerned judge.B. The status of all pending cases should be online.C. Government should look to settle disputes through arbitration and conciliation, rather than

courts.D. The responsibility on whether to appeal a decision in government should lie with a senior

official, not a junior official as is currently the case.

Case Studies:A. The Guyana National Assembly passed the Time Limit for Judicial Decisions Bill in

2009 which provides that a judge in a civil or criminal case shall pronounce a judgment within a stipulated time line after the case concludes. For instance, in criminal cases in the Magistrate’s Court, the magistrate is required to give his/her decision in six weeks.

B. The American Constitution restrains the Supreme Court in dealing with "Cases" and "Controversies." For example, John Jay, the first Chief Justice declined to advise President George Washington on the constitutional implications of a proposed foreign policy decision. The Court’s function is limited only to deciding specific cases. It does not provide advisory opinions. The American Supreme Court though has "original jurisdiction" in a few cases arising out of disputes between States or between a State and the Federal Government.

9. Abolish the anti-defection law for all Parliamentary votes except Money Bills and Confidence Votes

Strengths & Opportunities:A. MPs need to be able to express and vote according to their perception of national interest

on all issues. The anti-defection law states that if they vote against the direction given by their party, they would lose their membership in Parliament. It effectively converts them into a number to be counted as per the decisions of the party leadership.

B. MPs will have the incentive to consider various issues on their own merit as they will be required to exercise their judgement.

C. MPs will be answerable to their electors on their parliamentary performance as they do not have any excuse that they have to vote as per party diktat.

D. It will not bring instability as votes which can bring down an incumbent government will be governed by an anti-defection law.

Weaknesses and Threats:

A. Party leaderships may oppose this move as it weakens their authority over their party MPs. How to get it done:

A. This would require a Constitutional Amendment. Some MPs and parties may take the lead. MPs may move a private member bill to bring attention to this issue.

B. Manish Tewari had introduced a private member bill that takes the middle ground. It proposes to restrict the anti-defection law to confidence votes and money bills. Therefore, the stability of the government is preserved while MPs can vote their conscience on other issues.





Case study:C. Most mature parliamentary democracies do not have the anti-defection law. In such cases,

the government needs to convince a majority of MPs on contentious issues, and may occasionally not be able to carry Parliament with it on some issues. For example, in August 2013, the British Prime Minister lost a proposal in the House of Commons to go to war on Syria despite his government enjoying the support of a majority of members.

10. Strengthen the Parliamentary Committee system; Make hearings public, broadcast on television

Strengths & Opportunities:A. Parliamentary Committees provide a forum for MPs to go into depth on issues, and seek

inputs from experts and stakeholders. Given the limited time available for the full house to deliberate in detail on a large number of issues, committees can examine many more issues in depth, and report back to Parliament. The system can be strengthened in several ways.

B. Provide expert research staff to each committee to enable the committee understand the nuances of each issue, and to help them evaluate the inputs provided by expert witnesses and stakeholders.

C. Allow the committees to summon ministers to depose before them. The minister is the head of each ministry, and is the final decision maker on all policy issues. The committee system can improve the system of accountability of the executive government to the people through their representatives in Parliament.Televise or webcast committee meetings. Citizens will have access to the working of committees and can engage with their representatives in a more effective manner to raise issues of their concern. This will also increase the accountability of MPs to their electors with respect to their participation in committee meetings.

Weaknesses and Threats:A. There could be resistance from the government of the day which may not prefer committees

to be more effective in overseeing their work.B. Some MPs may not like the idea that their activity in committees is made more transparent;

they may resist increased accountability to the people. How to get it done:

A. These changes can be done by a change in the Rules and Procedures of Parliament. Such change can be done, in consultation with political parties, by the Speaker of Lok Sabha and Chairman of Rajya Sabha.

Case study:

A. The British Parliament has research staff attached to committees. The Liaison Committee (which is made up of the Chairs of House of Commons Select Committees) regularly questions the British Prime Minister, and these are webcast on Parliament TV. In the United States, the committee meetings are open to the public, and are telecast.




AGRICULTURE





1. Abolish Minimum Support Prices: Move to Income Support

Strengths and Opportunities:A. It will end price distortions in the agricultural economy which perversely incentivize

farmers to grow wheat and rice (which have MSPs) at the expense of all other commodities.B. It will help boost production of non-cereal food items, like vegetables.C. It will put a lid on food inflation since MSPs only move one way i.e. upwards. Most food

inflation is in vegetables. If production increases, prices will fall.D. An income support programme will ensure that needy farmers are compensated for any loss

in income caused by abolition of MSPs.

Weaknesses and Threats:A. Large farmers who benefit from MSPs will protest. They are well organized.B. There will be political opposition to what will be portrayed as an anti-farmer policy.C. Identifying needy farmers for the income support programme will be a challenge.

How to get it done:A. Announcement of abolition of MSP and introduction of an Income Support Programme

must be simultaneous. However, the implementation of both these policy measures could be synchronized in calibrated steps over a period of time, so as to ensure that such a major policy reform is not stalled by the sheer scale of the change.

B. Aadhar must be used for effective implementation of Income Support Programme.C. The need to curb food inflation – an issue that pinches the majority – must be used as

argument by the Government to persuade public opinion.Case Study:

A. New Zealand provides a perfect laboratory test of life without farm subsidies. Despite initial protests, farm subsidies were repealed in 1984. Almost 30 different production subsidies and export incentives were ended. According the Organization for Economic Cooperation and Development, only 1 percent of farm income in New Zealand comes from government protection and subsidies.

2. Announce a moratorium on export bans and futures trading bans

Strengths and Opportunities:A. Export markets offer a better price for farmers; they ought to be allowed to benefit from it.B. Proper, undistorted, price signals from the market are crucial for optimal sowing by farmers.C. Futures trading is a way for farmers to get better information about potential market prices.

Weaknesses and Threats: A. In the event of a shortage and a rise in prices, it is an easy policy option for Government to

ban exports to increase domestic supply. B. Futures trading is an easy fall guy for Government to blame its own inadequacy in easing

supply side bottlenecks to rein in food inflation.How to get it done:

A. Formulate a robust policy to facilitate quick imports of a commodity that is in short supply.B. Regulate commodities exchanges through SEBI (not FMC) so that there are no malpractices.

Ensure that a truly competitive environment is created to obviate any manipulation in thinly traded, loosely regulated exchanges.

Case Studies:A. Countries in the East African Community (EAC) have agreed to abolish food export bans




to allow free flow of cereals from surplus areas to deficit regions.B. In China, the Dalian Commodity Exchange leads the world in a number of soybean and

plastics contracts. The sugar contract on the Zhengzhou Commodity Exchange is the most extensively traded agricultural future or option in the world. The Dalian Commodity Exchange is the second largest agricultural futures market in the world by trading volume.

3. Invest in seed technology: Allow GM BrinjalStrengths and Opportunities:

A. In the next decade, land and fertilisers are unlikely to generate massive increases in agricultural productivity.

B. Technology has already been developed, tested and deployed elsewhere in the world.C. It can help address supply shortages and rein in food inflation.

Weaknesses and Threats:A. There will be objections on health, safety and biological diversity.B. There will be accusations of playing to the interests of multinational companies which own

the IPR for need seed technology.

How to get it done:A. Propagate the success of the one GM technology that has been used in India: BT cotton.B. Permit BT brinjal which has already been tested.C. Government can distribute seeds and bear part of the costs.D. Encourage domestic companies to invest in seed technology; give tax breaks; R&D support.

Case Study:A. The US, Brazil, Argentina, Canada are the leading countries to adopt GM/biotech crops.

The U.S. chose to innovate in agriculture and adopted GM maize (corn), soybeans and cotton. India too grows a record 10.8 million hectares of Bt cotton with an adoption rate of 93%.

4. Amend Food Security Bill; reduce coverage; the move to cash transfers

Strengths and Opportunities:A. The current Bill covers 2-3rds of India’s population; most estimates of poverty suggest a

rate not more than 30 percent of the population.B. Implementation of FSB in current scale will be a huge stress on fiscal deficit.C. Government procurement of wheat and rice will go up dramatically under FSB; it will

distort the open market and fuel food inflation.D. The bias towards wheat and rice in the agricultural economy must end.E. It will prevent further wastage in the PDS system.

Weaknesses and Threats:A. It is a recently passed bill – almost every party supported it – so amending it will be difficult.B. It will be perceived an anti-poor move.

How to get it done:A. Make a clear identification of the ‘poor’; then amend FSB to focus on the poor only.B. Eventually, the aim must be to offer cash transfers to the poor so that they can buy grain

from the open market.C. Aadhar must be used in PDS delivery and in a future cash transfer scheme. The implementation





can be in milestone-indexed and calibrated steps over a reasonable number of years.

Case Studies:A. Brazil’s BolsaFamilia and Mexico’s Oportunidadesprogramme -- involve targeting and

conditions for transfers. They also share two principal goals: namely, poverty alleviation and breaking the intergenerational transmission of poverty.

B. Chile launched the IngresoEtico Familiar (Ethical Family Payment) system in 2012 in which the priority is to give the poorest access to labour market. Thos who get a job will be entitled for a bonus.

5. Provide the financial resources for an agriculture extension officer in each district

Strengths & Opportunities:A. There exists a yield gap between the best farm & the worst farm in the same village. Then

there is a yield gap between that best farm and the university farm. That must be bridged.B. Opportunity exists today because advisory services to the farmers are not available. Services

to test soil, advice on pesticide & fertilizer use, bio manures, etc. can be given to change available knowledge into practices and so much more.

Weaknesses and Threats:A. Agriculture is a state subject & state governments have no money to give services. B. Returns are too long term to interest compulsions of political parties.

How to get it done:A. Centre can provide funds to appoint one extension officer in every village and to back him

with a support system. It will cost 1/10 of the requirement of the food security bill.B. Increasing awareness will transform theory into practice.

Case Study:A. Gujarat has a very good system of agricultural extension support. The state has recorded an

agricultural growth rate much higher than the India average in the last decade.

6. Abolish the Agriculture Produce Market Committee (APMC) Act

Strengths and Opportunities:A. Farmers deserve access to a free market; APMC’s are essentially local cartels.B. There is already movement to delist cereals and vegetables from APMC Act.C. Free and fair competition is the only way to rein in food price inflation.

Weaknesses and Threats:A. There will be resistance from states which implement the APMC Act.B. String vested interests of middlemen who benefit from current system will oppose the move.

How to get it done:A. Delist fruits and vegetables from the purview of the Act and not essentially direct it through

mandis.B. Support the growth of alternative models through which farmers can access bigger markets.C. Establish regulatory apparatus to oversee the functioning of these substitute models.




Case Studies: A. In India, states such as Odisha, Bihar, West Bengal and Assam have dismantled the APMC

Act. B. In Finland, there has been a shift towards a free market economy in the agricultural

policy since 1995, when Finland joined the European Union (EU). Between 1995 and 2005, the number of family farms and farmers in Finland declined by one third. However, as a member of the EU, Finnish agriculture is still strongly subsidized.

7. Allow farmers to manage irrigation distribution projectsStrengths and Opportunities:

A. The delivery efficiencies of canal based irrigation in India are poor. Wastage of water is high and irrigation is generally not controlled leading to severe restrictions in cropping and technology choices.

B. Studies show that farmer managed modernization and operation programs for levels below distributaries can double irrigation efficiencies. It should be possible to extend this program to a million hectares.

Weaknesses and Threats:A. There is a hesitation on the part of irrigation authorities to decentralize power.

How to get it done:A. Financial resources for irrigation from Centre to State should be directly linked to

decentralization.B. Leverage Pachayati Raj institutions to devolve functional and financial autonomy for

irrigation projects.Case Studies:

A. In Nepal, farmer-managed irrigation systems have achieved a high average level of agricultural productivity. These are not necessarily small in size; some of them, in fact, cover a service area of more than four thousand hectares.

B. In China, most irrigation systems are managed privately, not by the state.

8. Aid diversification to allied activities; Horticulture, Poultry, Fisheries & Animal Husbandry

Strengths & Opportunities:A. As the economy expands in India; there will be unparalleled demand of produce of animal

husbandry, fisheries, poultry & horticulture etc. and not from cereals coming out of crop sciences.

B. Profitability and opportunity is more for small and marginal farmers, and time lag to return is less.

Weaknesses and Threats:A. Too much debate focused on crop sciences.B. No breakthrough in research.C. Competition from imports will be a limiting factor in the future.

How to get it done:A. Offer a nominal interest loan from NABARD for farmers to acquire one good quality

animal depending on local land and weather conditions.B. Give proper vet advice in every place at nominal cost.C. Focus on quality not quantity as is presently done other things will follow automatically.





Case Study:A. Denmark, a very small country, is a powerhouse in agricultural exports with an explicit

focus on animal husbandry.

9. Institute a National Agriculture InsuranceStrengths & Opportunities:

A. Agriculture insurance will revolutionize agriculture as it will enable farmers to experiment and diversify to better crops and adopt latest technology more readily thus enabling more optimum utilization of inputs.

B. Will de-stress farmers and make farming a preferred option for youngsters.

Weaknesses and Threats:A. Too complicated to deliver in the initial stages.B. Difficult to monitor.

How to get it done:A. Government must pay part or whole premium for farmers accepting policy against crop

failure. B. Look at plantation crops models.C. Make a credible regulatory mechanism to enforce claim settlement by farmers.

Case Studies:A. Andhra Pradesh has “Village as Insurance Unit” scheme in all the districts of the state

from Kharif 2008 season onwards. It provided more benefits to the farmers as the losses in smaller area would be more representative. The crops for the village level implementation are selected based on the cropped area under the principal crops. In the country, National public agricultural insurance company AICI is jointly reinsured by central and state governments

B. In Mexico, National public reinsurance company (Agroasemex) provides voluntary reinsurance to private agricultural insurers and global reinsurers.

C. In Canada, Government insurance is shared between provincial and central governments with some global reinsurance participation

10. Encourage Mechanization, leasing through cooperativesStrengths & Opportunities:

A. Most farmers fall into debt traps. Owning machinery contributes to the cause. 99% of all farmers are buying machinery they will not be able to use for optimum time because of small holdings. For example sowing machinery, a farmer will not use it for more than 4 days in a year, but will buy the equipment, so cannot afford it. This gives an opportunity to explore.

Weaknesses and Threats:A. No formal institutional funding or structure is available. B. Will require interest free funding of machinery without government control.C. Policy makers cannot understand the economics of owing a machine to the farmer. They

keep increasing availability of credit for owing machinery by individual farmers.

How to get it done:A. Government should directly fund primary cooperative societies to buy machinery of their

choice and not make the mistake of giving machinery designated by government officers.




B. Allow members of societies to make the choice.C. Stop incentivizing machinery purchase by individual farmers, but increase manifold the

incentive for collective purchase.

Case Studies:A. In India, there are already a number of large farmer cooperatives, for example, Mahagrapes

in Maharashtra, and commodity boards, such as those for coffee and rubber, that act as sources of information for farmers involved in these organizations.

B. Agricultural research is not new in Brazil. Cheap labour also plays its part - but it was investment in technology that brought the country to its position among the top agricultural producers in the world.





CORRUPTION




1. Strong Lokpal, independent from executive but accountable to Parliament

Strengths and Opportunities:A. India’s premier investigation agency, the CBI has no credibility in anti-corruption probes as

it is not independent of executive.B. Successful prosecution and sentencing of the corrupt to jail terms will act as a serious deter-

rent to corruption.

Weaknesses and Threats:A. In the absence of proper accountability mechanisms, an independent investigation body can

run amuck, targeting even honest officials, and paralyzing the functioning of government.B. Lokpal’s investigating officers will be drawn from the pool of Indian Police Service officers

(and state police officers) who are part of the ‘corrupt’ system.

How to get it doneA. The head and members of the Lokpal must be chosen with bipartisan political consensus by

a Parliamentary Committee that has the widest representation of parties.B. The Lokpal must be accountable to Parliament and must present a report is every session

detailing progress of its various investigations.C. It should eventually aim to build its own cadre of investigators.D. The judicial process should be kept separate from the Lokpal.

Case Study: A. Indonesia’s Corruption Eradication Commission (KPK) formed in 2002 is independent

from the national police force. It has successfully prosecuted high profile officials and politicians.

2. All welfare programmes should be converted to cash trans-fers based on Aadhaar smart cards

Strengths and Opportunities:A. Aadhar-based verification will remove dummy names from beneficiaries list, a major

source of corruption.B. Cash transfers go straight into people’s bank accounts. They are superior to handouts which

happen through government officials and are vulnerable to siphoning.

Weaknesses and Threats:A. The utility of Aadhar should not be used as an excuse to expand careless welfare pro-

grammes.B. Technological problems with Aadhar may prevent it from being a universally accepted

verification scheme.C. The identification of targeted beneficiaries is outside the ambit of Aadhar and will still be

determined by government, opening the door for corruption.

How to get it done:A. Pass the enabling legislation for the UIDAI, with sufficient safeguards on data secrecy.B. Announce a Commission which has a three month mandate to recommend the mechanics

of converting existing welfare programmes to cash transfers

Case Study: A. The Bolsa Familia programme in Brazil has been hugely successful in reaching cash to

intended beneficiaries. It is a conditional cash transfer programme which requires people to fulfill certain health and education requirements for their children before they are eligible.





3. When awarding contracts for natural monopolies - mining, oil and gas, telecom spectrum - the answer is

a transparent auctionStrengths and Opportunities:

A. Any discretionary system, including first-come-first-serve opens the door for rent seeking and corruption. Competitive bidding will eliminate that.

B. A market-based distributions system will ensure that best, most efficient use is made of precious resources.

C. A fiscally constrained government can use it to generate much needed revenue.

Weaknesses and Threats:A. Auctions should not degenerate into a blanket revenue maximization exercise. By setting

unreasonably high base prices for bidding, like in telecom, resources may not end up being used at all.

B. In the case of some natural resources like water, the carry through impact of auctioning on final consumers may need to be regulated. Again, the best way is to give the needy a cash subsidy rather than price control.

How to get it done:A. Issue an executive order binding all ministries that dole out natural resources to holding

auctions. End ministerial discretion in this exercise altogether.B. Let independent regulators, rather than the ministries, recommend appropriate base prices

after accounting for different policy goals.Case study:

A. The public tendering of oil drilling rights has worked well in post-conflict governments of Mozambique and Angola. Brazil awarded a giant offshore oil block to a consortium includ-ing Petrobras, Shell, Total and two Chinese companies though its first oil auction in Oct 2013.The Myanmar government opened an auction of 30 offshore oil and gas blocks in 2013 to attract foreign multinational companies.

4. For land transactions, equalize circle rates with market rates

Strengths and Opportunities:A. The gap between low circle rates and high market rates is the leading reason for the genera-

tion of a large amount of black money and corruption in the system.B. It is in the interest of the vast majority of people who are looking to become home owners,

so that there is a natural constituency which will support it.

Weaknesses and Threats:A. It will disturb vested interests in real estate, who thrive on the current system even while

depriving the exchequer of legitimate revenue.B. As long as political funding is linked to real estate, any reform of the land market will dis-

turb vested political interests

How to get it done:A. Form alliances with state governments. Link it with a grand bargain on extra (more de-

volved) funding to statesCase Study:

A. The most notable and successful example of land reforms in India are in the states of West Bengal and Kerala. South Korea, Japan and parts of India enacted reforms that are also viewed as successful by experts.




5. Enforce transparency in electoral funding

Strengths and Opportunities:A. Opaque political funding is the biggest source of corruption. It needs correction.B. Conflicts of interest between receipt of funding and decision-making in government will

be exposed.

Weaknesses and Threats:A. A. It will be resisted by all political parties.

How to get it done:A. Make it compulsory for all parties to declare every source of funding, from Rs 1 upwards

on their website.B. Offer a grand bargain: no limits on raising funding in exchange for full transparency.C. Introduce strict penalties, possibly financial, for non-adherence to full transparency.

Case study: A. No country has evolved a satisfactory mechanism to ensure full transparency.

6. All government departments must be required to place all their rules, procedures and forms on their website;

queries (precede)Strengths and Opportunities:

A. The asymmetry of information between government and citizens is a source of rent seeking and corruption for officials. The information gap needs to be bridged.

Weaknesses and Threats:A. It will be resisted, particularly by the lower bureaucracy which derives its power and privi-

leges from this asymmetry of information.

How to get it done:A. An order from the Prime Minister’s office would be sufficient.B. Place one Joint Secretary level officer in charge of the exercise. Penalise that official if all

the information is not uploaded on the web in a defined period.

Case study: A. In most advanced economies, like the US and UK, all such information can be found on the

website of various government departments.

7. Minimise requirement for Affidavits and let self-attestation of affidavits become the norm rather

than the exceptionStrengths and Opportunities

A. The law doesn’t require affidavits in more than a dozen specific instances.B. Self-attestation works well in parts of India where it is already allowed.

Weaknesses and Threats:A. The incumbent bureaucracy will put up stiff resistance.





How to get it done:A. Extend it across all government departments in one go.

Case Study: A. In NOIDA in the National Capital Region, the quality norms of buildings can be certified

and attested by architects.

8. Set a time limit for adjudicating judicial casesStrengths and Opportunities:

A. Judicial delays are a great source of corruption not just in politics and bureaucracy, but also in the judiciary.

B. Apart from eliminating corruption, it will restore faith in the rule of law, so it’s crucial for the proper functioning of a capitalist democracy.

Weaknesses and Threats:A. The judiciary will protest citing the burden of a large number of cases.B. There is a small probability of miscarriage of justice if trial has to be expedited. It creates

some room for error.

How to get it done:A. There should be only two levels of appeal.B. Cases where the government is a litigant, and this is the majority, must be handled through

super- fast courts.C. Government should minimize its own litigation by choosing conciliation in several cases.D. Names of those in custody but not produced before the court should be available on the

Internet. The information on this count should mention the charge, the maximum sentence for the offense, and time already spent by under trial in prison. If the person has spent more time in prison than the maximum sentence would allow for, the person should be released.

E. Monitoring mechanism should be on the internet so that the general public knows the status of all cases.

Case Study: A. In advanced democracies like the US, appeals are not entertained by higher courts unless

there is a clear miscarriage of justice or gross misinterpretation of the law.

9. Prescribe time limits for key bureaucratic decisions and impose stiff penalties for not keeping information

systems up to date Strengths and Opportunities:

A. Delays in routine decision making for essential services (like passports, birth certificates, death certificates, and clearances for industries) are a major source of corruption.

Weaknesses and Threats:A. It will be resisted by the bureaucracy.

How to get it done:A. Ask concerned ministries to submit, within 100 days, reasonable time limits for the deci-

sions they are in charge of. For example, there should be a 30 day limit for issuing pass-ports. There should be a 45 day limit for a decision on environment clearance.

B. All delays should be put up on the website with explanations as to why the delay has hap-




pened.C. Appoint a point person in each department (a senior official) who is responsible for keeping

information system up to date.

Case Study: A. Singapore and Hong Kong had the most efficient bureaucracies, according to the survey of

expatriate business executives by the Political and Economic Risk Consultancy (PERC) in 2010.

10. Leverage the reach of mobile phones to enforce transparency and accountability on Government

Strengths and Opportunities:A. Internet penetration is still low in India but mobile phone ownership is virtually universal.B. Instead of paying bribes for key services, citizens should be allowed to make complaints

over SMS which should be responded to within set time frames.

Weaknesses and Threats:A. The technical backbone will need to be built. The Aadhar example shows it is not easy and

may take time.

How to get it done:A. Hire expertise from India’s top notch IT sector to set up systems.B. Mobilise public opinion around this exercise, more aggressively than has been done for

Aadhar.Case Study:

A. In the 2012 United Nations ranking of e-government survey rankings of its 193 member states, the Republic of Korea emerged as the world leader, scoring 0.9283 on the index fol-lowed by the Netherlands (0.9125), the United Kingdom (0.8960), Denmark (0.8889), and the United States (0.8687).





EDUCATION AND SKILLS




1. Permit for-profit institutions at all levelsStrengths & Opportunities:

A. Given fiscal constraints and limitations of not-for-profit sector, it is necessary to expand the number of schools-only way to reap demographic dividend.

B. Private sector, operating for profit, will churn out better services to attract paying custom-ers.

Weaknesses and Threats:A. Challenge of maintaining equity because only the rich will have access.B. Populist politicians and other vested interests will oppose it.

How to get it done:A. If for-profit institutions are allowed in other public services like health, there is no logic to

deny it in education. B. Lease out the existing government schools’ infrastructure, either fully or partially (possibly

through evening schools), under a public-private partnership model.C. Enact an enabling legislation at the Centre. Let modalities be worked out by states. That

will reduce the blowback from resistance on Centre.Case study:

A. Among emerging economies, Brazil permits for-profit education institutions. The Govern-ment ensures that they comply with regulatory standards by ensuring that students on Gov-ernment-scholarships (a substantial number) only attend institutions which are compliant.

2. Move to Vouchers; reduce direct spending on government schools

Strengths and Opportunities:A. It will give parents and pupils choice, instead of the current approach of handing out rights

which guarantee neither quantity nor quality.B. It will help improve quality of schools, both government and private, through competition.

Weaknesses and Threats:A. Finding an appropriate delivery mechanism which will reach intended recipient without

leakages.B. Need to build many more schools so that the numbers are enough for demand.

How to get it done:A. Piggyback on Direct Benefits Transfer for implementation. It can be rolled out immediately

with the LPG subsidy and scholarship transfer schemes.B. Mobilise public opinion around the concept of choice. The failure of RTE to deliver supe-

rior outcomes should be highlighted as an inherent limitation of a rights-based approach.Case Study:

A. Vouchers have been used successfully in some Latin American countries like Chile and Colombia, where research has found voucher schools outperforming regular government schools.

3. Standardise Assessments: ensure every child is learning in school

Strengths and Opportunities:A. Low-stakes assessments can provide continuous feedback to the stakeholders in the sys-

tem-teachers, principals, and policymakers-on where corrective action is required. B. Assessment results can help remediate learning deficits and improve system accountability.


A. Current focus is on measuring inputs: NCERT-administered District Information System of Education (DISE) tracks over 100 characteristics of primary schools across the country, but





not learning levels of students. B. Capacity building required for education officials in order to equip the administration to

generate and use key data on school outcomes to guide interventions that improve student achievement.

C. Globally, Indian cities ranked second to last on the 2009 PISA, a worldwide assessment conducted by the OECD. Need to benchmark our performance against the best interna-tional systems.

How to get it done:A. Create a robust Education Quality Indicator (EQI) Framework to monitor progress on pro-

viding quality education to all children.B. Administer nationwide Standardized Assessments in Classes 3, 5, 8 and 10 that test chil-

dren’s conceptual understanding and provide information on whether every child in school is actually learning.

C. Develop a School Rating Index that compares student performance across schools. D. Amend RTE so that there is less focus on inputs and more on output.

Case Study:

A. Brazil, as part of its education reform in 1996, created an evaluation System for Basic education (SaeB) for grades 4, 8 and 11. Over time this assessment system changed from a sample examination to a census examination called Prova Brazil, taken by all students in grades 4 and 8 in public urban schools. SaeB ensured that schools, municipalities and states would receive data that would tell them how their students fared on an examination of the curriculum standards in Portuguese and Mathematics set by the federal government. The government also provides each secondary school with information on the progress it needs to make to match the average PISA performance level by 2021. Brazil has since made sig-nificant progress in its PISA score from 2000 to 2009.

4. Promote continuous teacher training so that they are in touch with the developments in the field and well-versed with

the use of technologyStrengths & Opportunities:

A. This will enable teachers to be in touch with the developments in their field and the indus-try.

B. This will enable them to be well-versed with the use of technological tools that will en-hance education delivery.


A. The current educational system lays a lot of focus on ‘teaching to complete the syllabus’ rather than ‘teaching so that students learn’.

B. Education has become a life-long learning necessity. Unless teachers keep pace with this changing need, they will not be able to foster the culture of life-long learning.

How to get it done:

A. Public-Private-Academia partnerships.B. Incentivize teachers.

Case study:

A. Campus Connect program by Infosys.




5. Institute a new independent Higher Education regulator Strengths and Opportunities:

A. Best way to free higher education from the regressive control of Union HRD Ministry.B. Will lead to abolition of UGC, AICTE, MCI which have been mired in corruption and in-

competence.C. Will constitute the necessary regulatory structure for the entry of for-profit private institu-

tions and other private and government institutions.

Weaknesses and Threats:A. It should not become a new institution of licence-raj. B. It should not be taken over by retired academics but should be staffed by eminent academ-

ics.C. It will be resisted by ministries like Health and Law which control education in medicine

and law. How to get it done:

A. Appoint a reformist HRD minister who is willing to cede turf. Appoint Health and Law Ministers who are on board with reform of medical and law education.

B. Legislation is already drafted. The National Knowledge Commission also has a ready-to-use blueprint.

Case study:C. Australia’s Tertiary Education Quality Standards Agency (TEQSA) is an independent regu-

lator of higher education. It was established recently in 2011 and can thus be a good role model for a late-starter like India.

6. Deregulate Distance and Online Higher EducationStrengths and Opportunities:

A. Only 8 million people pass the Class 12th exam every year of which only 5 million go to College. India’s Gross enrollment in higher education is half the developed country average and considerably lower than other developing countries.

B. India faces the impossible trinity of cost, quality and scale. C. The biggest constraint is teachers across the country and we have to figure out how to lever-

age the good ones. Weaknesses and Threats:

A. The current framework for distance education restricts universities to state boundaries. B. The regulatory framework for distance education is in flux since the Distance Education

Council was dissolved.C. Distance education has not been completely freed from face-to-face requirements. D. Online courses by startup universities are being offered globally (MOOCs) and can even

be taken by students in India but Indian universities are not able to offer them because of the regulatory fog.

How to get it done:A. Deregulate distance education completely; allow all public and private universities to offer

their courses all across India.

Case Studies:A. Massive open online courses (MOOC’s) like Coursera, Edx, Udacity. B. Open University of UK.





7. Allow foreign universities to set up campuses Strengths and Opportunities:

A. It will raise the supply of seats in higher education, desperately needed.B. It will create competition as students get more choices. Quality across the system is bound

to improve.

Weaknesses and Threats:A. There is a risk of some less than superlative universities setting up campuses in India.B. There will be a protectionist backlash from some politicians and left-leaning academics.

How to get it done:A. The setting up of an independent regulator staffed with high quality experts will regulate

standards, but not entry and exit-that will only create a new licence raj.B. Build public opinion in favour of foreign universities by arguing in favour of the need for

greater quantity of universities if India’s youth are to be employed. Students and parents are key constituencies which must be mobilized in support.

C. A draft bill to allow foreign universities is already in Parliament. Make amendments if necessary and pass it.

Case study:A. India’s competitor nation China has welcomed the setting up of foreign universities for

over a decade, particularly from English-speaking countries which have improved supply and quality of education.

8. Raise fees at Government-funded Universities

Strengths and Opportunities: A. India’s best universities will continue to be state-run in the foreseeable future. It is essential

to upgrade their standards, particularly physical infrastructure without using government funds.

B. It will enhance equity. Those who can afford to pay should not be subsidized. The genuinely needy can be given scholarships (the will be the KEY – to have a successful and significant scholarship model such that there is almost 100% access for deserving/needy students.)

Weaknesses and Threats:A. There is a danger that the Government will continue to interfere in their functioning and

academic standards.B. Populist politicians, activist teachers and misguided students will rise in uproar and try to

block change.

How to get it done:A. Government should simply give full autonomy to Government Universities in all matters,

including the setting of fee. That way the onus of change, and blowback from resistance, will be on individual universities rather than government.

B. Use the argument of equity and fiscal constraints to convince public opinion.

Case Study:A. In higher education, user charges are common in several emerging economies. That is

because students of higher education generally get a good return on their investment com-pared to those who have completed only primary or secondary school.




9. Remove apartheid between Education and Training; NVEQF, Vocational Universities, Community Colleges

Strengths and Opportunities: A. The social signaling value of vocational training is low; it is for “other people’s children”. B. The employability of a large chunk of graduates is very low.C. Almost 105 lakh and 80 lakh students fail the Class 10 and Class 12 exam every year.

There are few formal on and off ramps back into the formal system for them. D. Most jobs in the future require the right balance of skills and knowledge. E. We need to create mobility between certificates, diplomas, associate degrees and full de-

grees. Weaknesses and Threats:

A. Academics believe that the world of knowledge and skills should be kept separate.B. The Ministry of Labour legislates skills while MHRD regulates education; the enabling

legislation for mobility NVEQF (National Vocational Educational Qualification Frame-work) is stuck in a turf war between the two ministries.

C. Currently higher education legislation does not allow granting credit for on-the-job-train-ing (apprentices) and it makes recognition of prior learning very difficult.

How to get it done:A. Immediately get the inter-ministerial issues around NVEQF resolved and recognize one

framework.B. Get UGC to notify two year associate degree programs under recognized degrees and rec-

ognize apprenticeships as classrooms. Case Studies:

A. 50% of college enrollment in the US is in community colleges that offer two year associate degree programs.

B. 40% of high school leavers in Germany and Austria enter the labour force through an ap-prenticeship.

10. Reboot the Apprenticeship Act of 1961Strengths and Opportunities:

A. India only has 3 lakh apprentices while Germany has 4 million, Japan 10 million and China 20 million.

B. The “learning by doing” and “learning while earning” of apprenticeship are a powerful vehicle for skill development.

C. The biggest challenge for skill development is the gap between what employers want and what education provides; apprentices narrow that gap in real time.

D. This issue has been long recognized as an important agenda; it was the 20th point in Indira Gandhi’s 20 point program in 1975.

E. Non-engineering graduates (80% of graduates) are not covered under the current regulatory regime.


A. The Apprenticeship Act of 1961 was written for a very different Indian labour market and has a lot of constraints.

B. The mandate for implementation of the Act is split between the Ministry of HRD and the Ministry of labour.

C. Employers view many of the penal provisions in the Act (Jail etc) as draconian and there-fore choose not to engage with it.





How to get it done:A. We need to urgently amend the Apprentices Act of 1961 as the per report of the Planning

Commission (http://planningcommission.gov.in/reports/genrep/skilldev/sbcom_app.pdf).B. This includes solving the regulatory, administrative, marketing, and other issues highlight-

ed.C. We need to revamp the Board of Apprenticeship Training (BOAT) of MHRD financially,

organizationally, technologically etc.

Case Study:A. The apprenticeship regimes of Germany, France, Singapore and Australia.




http://planningcommission.gov.in/reports/genrep/skilldev/sbcom_app.pdf

ENERGY





1. Create a new ministry of energy by integrating the ministries of petroleum & natural gas, power, new and

renewable energy, coal and the Nuclear Power CorporationStrengths and Opportunities:

A. It will allow the government to frame a coherent energy policy that cuts across different sub sectors.

B. It will end the coordination problems and turf wars between existing ministries which often work at cross purposes.

Weaknesses and Threats:A. It will mean that the jobs of four cabinet ministers will be reduced to one.B. It will be resisted by the bureaucracies in each of the ministries.

How to get it done:A. An executive order announcing the merger of the 4 ministries (plus one PSU) as soon as the

PM is sworn is, before the cabinet portfolio allocation is made.B. A minister of state must be appointed for each sub-sector who can be responsible for the

execution of projects in that sub-sector even as the cabinet minister frames overall policy and ensures coordination.

Case Studies:A. In Germany, the Federal Ministry for Economic Affairs and Energy has the lead responsi-

bility for the formulation and implementation of Energy policy. B. The US and UK have unified ministries of energy.

2. Every unit of fuel and every unit of energy should com-mand a market price: subsidise the poor

through direct cash transfersStrengths and Opportunities:

A. It will help contain the government’s fiscal deficit.B. It will help the rational use of energy resources as people moderate their consumption ac-

cording to market prices.

Weaknesses and Threats:A. It will be viewed as an anti-poor, anti-middle class move.B. It will be near impossible to forge a broad political consensus on it.

How to get it done:

A. Announce an immediate and complete deregulation of diesel prices. To make this politi-cally acceptable, the current scheme of 50 paise adjustment per month should be consider-ably accelerated, perhaps to Rs 1-2 per month.

B. Government should end the practice of dictating the prices of petrol and diesel to oil PSUs.C. Announce an in-principle end to subsidies for LPG and kerosense with the assurance that

these will be phased out only when a direct cash transfer subsidy scheme for the poor is implemented. Announce a tight time-table along with the launch of several closely moni-tored and scalable pilot projects.

D. Use Aadhar to fast track the implementation of cash subsidy scheme for the poor.




Case Studies:A. Russia announced plans to raise regulated natural gas tariffs on the domestic market by

15 percent for all users from July 2013. China announced that oil product prices would be adjusted every 10 working days to better reflect international prices from March 2013.

B. Subsidies to coal producers, for example, have been phased out or reduced sharply in recent years in several OECD countries.

3. End Coal India’s monopoly over the mining of coal; Allow domestic and foreign investors to mine coal and sell in the

open marketStrengths and Opportunities:

A. As a monopoly that makes super-profits, Coal India has no incentive to ramp up production to the levels India’s energy sector needs.

B. India’s power sector is predominantly dependent on coal. Captive mining by private sector is not a substitute for open competition in coal mining.

C. India’s balance of payments has suffered because of excessive imports of coal despite suf-ficient domestic reserves.

Weaknesses and Threats:A. Coal India will resist and try and protect its monopoly status.B. Domestic interest groups will resist opening coal mining to foreign investors.

How to get it done:A. By creating a unified ministry of energy, the Coal Ministry’s resistance to opening their

prized PSU to competition will be reduced.B. Offer Coal India full managerial autonomy in return for putting them on a level playing

field.Case Study:

A. Australian Federal Treasurer Joe Hockey removed foreign investment conditions on the ownership of Yancoal Australia Limited in 2013. The riders were earlier placed on Yanzhou Coal Mining Company, a Chinese state-owned enterprise, in 2009, including reducing its ownership in Yancoal, which operates mines in NSW and Queensland, from 100% to less than 70%.

4. Give complete autonomy to energy PSUs like ONGC, IOC, NTPC; Begin the process of privatization via a National

Shareholding Trust accountable to ParliamentStrengths and Opportunities:

A. The problem is not ownership per se. The problem is the consequence of ownership. Gov-ernment ownership inducts both sloth and corruption into the management of public sector units; Government is still a major player in energy.

B. The cohabitation of government ownership in sectors opened to private investment has only enhanced renting – as is evident in the civil aviation sector - and arbitrage opportunities – in coal and power, for instance -- thanks to inefficiencies embedded through ownership.

C. Public ownership in its truest sense will enhance accountability, investment and efficiency through competitive practices.





Weaknesses and Threats:A. Ministers will resist an erosion of their turf of patronage.B. There will be a political storm over privatizing profitable PSUs, even though these profits

are because of protection not competitiveness.

How to get it done:A. The government could transfer its holdings in the PSUs to a trust – something like the Na-

tional Shareholding Trust suggested to the NDA regime by the Disinvestment Commission. B. The PSUs would be out of ministerial stranglehold, under professional managers and the

Trust could be brought under Parliamentary oversight. The trust would in phases offload government’s holding from current to 51 percent and to the critical 26 percent – to employ-ees, mutual funds, insurance companies and even a strategic investor to induct technology.

C. At a later stage, consider strategic sales of particular PSUs.

Case Studies:A. During the Margret Thatcher years, more than 50 companies in UK were sold or privatised

including power and water industries, raising more than £50bn for the Exchequer.B. The Central Electricity Generating Board and 12 regional boards in England and Wales

were renamed Regional Electricity Companies and privatised in December 1990. CEGB’s non-nuclear generation was carved up between National Power and PowerGen and priva-tized the following year.

C. Peru's Congress approved the privatisation of up to 49% of state energy firm Petroperú on December 12th, 2013 as part of a government plan to expand refining capacity. Petroperú will also be restructured to gain access to capital markets.

5. Set strict time limits for environment clearances for mining and energy projects

Strengths and Opportunities:A. The Union Ministry of Environment has emerged as the biggest roadblock to mining and

energy projects in recent years.B. While environment issues are important, delays over clearances are not.C. Investors want certainty.

Weaknesses and Threats:A. Environment ministry will resist any encroachment on its turf.B. Environment NGOs could launch a campaign against this decision.

How to get it done:A. Appoint an environment minister who appreciates the need to balance the needs of fast

growth and protection of the environment.B. Tie in time limits for environment clearances with the agenda of broader reform of the bu-

reaucracy. That way environment ministry bureaucrats won’t feel singled out.C. Impose financial penalties on officials responsible for delays.

Case Studies:A. Brazilian mining firm Vale has cleared a major hurdle in its plans to build a railway to

serve the new Carajas Serra Sul (S11D) mine in the state of Para after the project was granted environmental approval by the federal government.




B. Spain altered environmental policies to speed approvals on industrial projects from pig farms to oil rigs and will regulate shale drilling. Explorers including BNK Petroleum Inc. (BKX) of Canada and San Leon have set up Spanish offices to explore shale resources, which have revolutionized natural-gas production in the United States.

6. Corporatise and merge state electricity discoms into a single national entity

Strengths and Opportunities:A. Generation must be ramped up to 800,000 MW by 2030 to sustain 8 plus per cent GDP

growth. B. This cannot be achieved if SEB’s are persistently bankrupted by state governments. C. Accumulated losses of SEBs are over Rs 190,000 crore -- of which 50 per cent are subsi-

dies not paid for by the states (whereas Section 65 of Electricity Act 2003 specifies subsidy must be paid by states to utilities in advance) and the rest is a mix of commercial losses and theft. National average for T&D losses is 25 per cent (35 % in nine states). This is clearly is unsustainable.

Weaknesses and Threats:A. States will resist ceding control and letting go of the attendant freebies.

How to get it done:A. HIVE off the Distribution arms of SEBs, corporatize and merge them into one national

entity and list them, insulating them from political profligacy. B. INSURE receivables by inducting a clause for direct deduction from centre-state transfers

endorsed by Finance Commission. C. The new grid will continue to distribute power and sign PPAs. Its size will enable better

financial engineering. D. Give a strong ‘opt-in’ option to states. The Centre will buy out the state discom (based on

a reasonable valuation) which will result in transfer of resources to the state in lieu of the energy asset.

Case Study:A. The electricity industry operates a single wholesale market across Ireland known as the

Single Electricity Market or SEM. Electricity across the island is bought and sold through a single pool, which has augmented competition, efficiency and security of supply. The operation of this market is facilitated by the Single Electricity Market Operator (SEMO). SEMO is a contractual joint venture between the two system operators - SONI in NI and EirGrid Plc their counterparts in the Republic of Ireland.

7. Create a cross-border energy grid: tap the hydro-power potential of neighbouring countries

Strengths and Opportunities:A. The Himalayan region has an immense potential for hydro power if harnessed intelligently.

India could harness as much as 70,000 MW of hydro power in partnership with Nepal and Bhutan as also with Bangladesh.

B. There is also the potential of bringing power-starved Pakistan into the grid if it can land gas from Iran.

C. This will enable India to lessen dependence on fossil fuel imports, deliver a better mix in terms of costs and reduce carbon footprint.





D. It will deliver energy and income to the neighbours.

Weaknesses and Threats:A. India’s diplomatic relations with neighbours, particularly Nepal, Bangaladesh and Pakistan

have deteriorated in recent years. There is a trust deficit.B. India will have to finance whatever additional infrastructure is necessary to complete the

transmission grid.

How to get it done:A. Existing collaboration with Bhutan and Nepal illustrates the potential of generating power

in neighbouring countries, sharing equity power and carting it on the Indian grid. B. There is merit in creating an international power company (and an independent sub-conti-

nental grid) with Nepal, Bhutan, Bangladesh, Pakistan, Sri Lanka and even Myanmar. The equity could be a hybrid of cash and resources and power carted onto the grid could be priced appropriately and shared.

Case Studies:A. The proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline is ex-

pected to be completed by 2017. The pipeline will transport Caspian Sea natural gas from Turkmenistan through Afghanistan to Pakistan and India.

B. ASEAN (Association of Southeast Asean Nations) has an energy cooperation plan, with its first phase running from 2010-15 to build gas pipelines (Trans-Asean Gas Pipeline) (TAGP) and power grids connecting member countries for the purpose of trade as well as enhancing energy security.

C. The Trans-Thailand-Malaysia Gas Pipeline was commissioned in 2005, which allows Ma-laysia to transport natural gas from the Malaysia-Thailand Joint Development Area to its domestic pipeline system.

D. China received Kazakh and Russian oil from a pipeline originating in Kazakhstan when its transnational oil pipeline was inaugurated in May 2006. The 200,000 bbl/d pipeline spans 620 miles, connecting Atasu in northern Kazakhstan with Alashankou on the Chinese bor-der in Xinjiang. China has also revived its plans to construct an oil import pipeline from Myanmar through an agreement signed in March 2009.

E. Russian state-owned oil giant Transneft began construction in April 2006 of a pipeline that will extend 3,000 miles, from the Russian city of Taishet to the Pacific Coast. Known as the Eastern Siberia-Pacific Ocean Pipeline (ESPO), the project will be completed in two stages.

8. Create ready-to-dig opportunities for exploration companies

Strengths and Opportunities:A. India needs to desperately ramp up production of fuels. Availability and affordability lead

to productivity. B. India’s economy cannot afford the dependency it currently operates under. It imports nearly

80 per cent of its petroleum needs and over 100 million tonnes of coal besides gas and uranium. This dependency is not sustainable -- in terms of the geopolitics and economics.

C. Investor interest is always seasonal given the plethora of competing opportunities. Time take from interest to returns is critical. Most importantly, India can neither afford to go through the Jurassic process and wait for exploration to deliver nor can it afford the cost vagaries that come with imports.

D. The investment regime is pocked with irrationality. Pricing, marketing, end-use are all de-




termined by the government.

Weaknesses and Threats:A. There will be accusations of favourtism to private explorers.B. Bureaucracy will try and out hurdles in the process.

How to get it done:A. Ready-to-dig-explore investment opportunities incubated by either a PSU in the domain

or an inter-ministerial group headed by the Prime Minister – with all clearances should be offered via an auction to investors.

B. There should be an escrow of guarantees and the unit could charge a fee from the investor.C. Pricing should be market determined.

Case Studies:A. As per IEA’s World Energy Outlook 2013 Factsheet, Brazil’s oil production will rise from

2.2 mb/d in 2012 to 4.1 mb/d in 2020 and to 6 mb/d in 2035, making it the world’s sixth-largest oil producer in 2035 due to its highly complex and capital-intensive deepwater developments. Brazil is set to strengthen its position as the global leader accounting for almost 60% of global deepwater production in 2035.

B. The U.S. Congress has passed legislation to open the way for the shale gas boom. Ground-swell of project interest emerged as the government embraced Repsol SA (REP)’s request to explore off Spain’s Canary Islands and backs the development of untapped shale areas. About 70 permits are in effect for prospecting in Spain, 80 percent higher than five years ago, according to trade groups.

9. Upgrade the Solar Energy Mission: target 30,000 MW instead of current 20,000 MW capacity in ten years;

Encourage wind-based powerStrengths and Opportunities:

A. India’s energy consumption is as yet low. Per capita energy consumption is 585 kg of oil equivalent compared to world average of 1802 kg, 1575 kg of China or 7000-plus kg of US. Per capita electricity consumption is barely 778 kwhr compared to 2471 in China or 13647 in the US. It has the opportunity to go green.

B. With 300 days of sunshine and average temperatures of 26 degrees, solar power has huge potential.

C. The potential of wind power – onshore and offshore is huge as is the possibility of harness-ing tidal power on the 7500 km coastline.

Weaknesses and Threats:A. Financial viability of SEBs and political ability to champion the cause of renewables.

How to get it done:A. The first policy change required is flexibility in grid management. Second is digitization or

investment in smart grids. Third is the facility of metering and reverse metering. Fourth, is the need to rewrite the incentives model – step away from pure subsidies to participative compensation.

B. Housing societies could be incentivized - extra FSI/FAR for instance -- to put up roof-top panels and upload power to the grid. The SEB/Discom could either compensate directly or adjust power received from power consumed through reverse metering.

C. Availability of space is an issue for solar projects. The Gujarat canal-top solar generation





illustrates possibilities. India has 28 major irrigation projects and thousands of km of canals – just the main feeders of top five canals add up to 2000 km.

D. Indian Railways consumes over 9000 million kwhr of power and 2 billion litres of diesel to haul its trains and over 2000 million kwhr and 33 million litres of diesel for station-ary power. While a pilot project is looking at solar powered Duranto/Rajdhani, the bigger potential is solar power generation using the vast real estate – 6800-plus railway stations -- under its command.

E. The possibilities are endless – from getting Panchayats to invite investors/government agencies to set up solar projects that will deliver in-situ power to NHAI examining the potential for wind power along national highways.

Case Study:A. In 2013, China set a record by adding at least 12 gigawatts of solar capacity — 50 percent

more than any country has ever built in a single year. Chinese solar manufacturers that are focused on silicon technologies such as Trina and Yingli or newer thin-film entrants like Hanergy can considerably upgrade their existing technology through imports of innovative and advanced technology from Western countries.

10. Address the demand side to encourage energy efficiency: make the GRIHA system of rating buildings mandatory;

Impose higher taxes on energy inefficient household appliances and motor vehicles

Strengths and Opportunities:A. A mix of regulation and taxation can easily achieve more efficient energy use.B. In an energy-scarce country like India, conservation has to be part of a sustainable energy

strategy.C. Construction, household appliances and motor vehicles are where energy is wasted because

of wrong incentives and can be conserved.

Weaknesses and Threats:A. There are inherent dangers in government using regulation and taxation as policy instru-

ments. They can be misused or over extended.

How to get it done:A. Regulation should set certain minimum standards of energy conservation. Like the GRIHA

ratings do in construction.B. There is a case for taxing more heavily gas guzzling SUVs/large cars to dissuade use.C. Invest heaving in public transport systems so that dependence on private vehicles comes

down.

Case Studies:A. On 1 October 2012, the Greenhouse and Energy Minimum Standards (GEMS) legislation

came into effect, creating a national framework for appliance and equipment energy ef-ficiency in Australia.

B. The EU has set policy objectives in the areas of energy and climate change and has com-mitted to achieve targets with respect to energy savings, reductions of greenhouse gas emis-sions (GHG) and deployment of renewable energy sources by 2020. The EU has progres-sively preferred economic or market-based instruments (“MBI”) – such as indirect taxa-tion, targeted subsidies or tradable emission rights – for such policy purposes.




FINANCIAL MARKETS





1. Make RBI a constitutional body independent from Finance Ministry; interest rates should be determined

by a monetary policy committeeStrengths and Opportunities:

A. This step would bring RBI in line with most central banks around the world, which are independent constitutional authorities set up to pursue a sound monetary policy with the primary objective of combating inflation and maintaining systemic financial stability.

B. Setting up a monetary policy committee (MPC) will ensure plurality of opinion in deciding the interest rates; at present, Governor is the decision-making authority.

Weaknesses and Threats:A. The Finance Ministry will resist constitutional status to RBI.B. It may be argued that in a democracy, RBI should be accountable to the executive.C. If the members of MPC are appointed by the government, they can influence policy in a

manner the government wants.

How to get it done:A. It should be done with the first budget; it will inject huge credibility into the fight against

inflation.B. Members of the monetary policy committee must be selected in a bipartisan manner by the

PM and Leader of the Opposition based on the recommendations of an expert committee.C. RBI Governor should be made directly accountable to Parliament for his actions and

decisions.

Case Study:A. The experience and practices of the five best central banks (including the US, UK, Canada

and Europe) around the world have already been studied by FSLRC.

2. Abolish Forwards Markets Commission; Bring commodities exchanges under SEBI preview

Strengths and Opportunities:A. Forwards Markets Commission (FMC) lacks independence from the executive; it reports to

the ministry of consumer affairs.B. The FMC has proved to be an inadequate regulator in light of the NSEL scam.C. Commodities markets need proper regulation if politicians are to be prevented from

intervening and banning ‘thin’ futures markets.

Weaknesses and Threats:A. The ministry of consumer affairs and FMC will resist.B. Vested interests in commodity trading who benefit from weak regulation will try and block.

How to get it done:A. The FMC bureaucracy can, in part, be absorbed into SEBI as a new division.B. SEBI can have a full-time member who specializes in commodities markets.

Case Study:A. In Tokyo, the Commodity Derivatives Act necessitates commodity exchanges to properly

conduct self-regulatory activities for fair transactions on commodity markets and protection of customers. The Exchange has established the Self-regulatory Committee to ensure good




governance from the viewpoint of an organization operating both as an exchange with the public mission and a profit-seeking corporation and to aptly conduct self-regulatory activities.

3. Liberalise the banking market by removing all barriers to foreign investment and privatizing state-owned banks

Strengths and Opportunities:A. It will make ALL Indian banks more efficient, cost-effective, and competitive (domestically

and globally).B. It will make banking services more responsive to customer needs.C. It will remove the constraint of a financially-strapped government from recapitalizing

banks.D. It will enable India to export banking services.

Weaknesses and Threats:A. There will be resistance from vested interests of GOI, PMO, Ministry of Finance, PSB

(public-sector banks) staff unions, and the political class- all of whom benefit from the abuse of power and influence that state-ownership of banks confers.

B. There will be concerns that privatized banks will not meet priority needs of the poorest for savings and borrowing.

C. There will also be concerns that open entry of foreign banks being allowed to compete on an equal footing will make India more vulnerable to external financial crises.

How to get it done:A. Remove the dead hand of government from interfering in the ownership/governance of

banks; pre-empting 30-40% of deposits through SLR and CRR; and the continual misuse of PSB lending powers, i.e. favouring so-called priority sectors, politically well-connected borrowers, and crony capitalists.

B. Break-up SBI into four regional banks to reduce systemic risk and privatize them ASAP. Consolidate the 17 smaller PSBs into four large banks and privatize them.

C. Allow major domestic private (and privatized) banks--whose ownership is now concentrated in FIIs to the extent of 74% of share capital -- to bring FDI into their ownership structures if they wish.

D. Allow 100% FDI in the banking sector providing foreign banks entering India meet stringent tests.

E. Remove all restrictions on approval of branches and ATMs opened by any bank (including all foreign banks operating in India). Allow the market, rather than RBI, to decide which banks should open branches where, and treat all banks equally when it comes to branch/ATM banking expansion.

Case Study:A. Learn selectively appropriate lessons from best practices in the world’s largest and most

competitive banking markets i.e. the US, UK, EU, Japan, Canada and Australia.

4. Allow 52 percent FDI in insurance; privatize government-owned insurance companies

Strengths and Opportunities:A. It will increase competition and bring more products and choice for consumers.B. It will boost the efficiency of Indian insurance companies.C. It will increase the penetration of insurance in India.





Weaknesses and Threats:A. There will be resistance from vested interests of GoI, PMO, Ministry of Finance, PSI

(public-sector insurance companies) staff unions, and the political class.B. There will be concerns that private insurers may not meet priority needs of the poorest, for

proper insurance against the risks they confront. C. There will be concerns that domestic PSIs and domestic partners in insurance JVs will be

disadvantaged by the superior knowledge/capability of foreign insurers when it comes to customer service, products and competition in the marketplace.

How to get it done:A. Privatize and break-up LIC (which today poses perhaps the largest single source of

systemic risk in the Indian financial system and operates in an opaque manner in making its unlisted investments), GIC and other public insurers/re-insurers into 3-4 viably large and well-capitalized insurers that are immediately privatized. That would reduce systemic risk significantly.

B. Compensate over time, through preferential tax treatment, foreign partners in insurance JVs who have for 8-13 years borne all the capital risks of their JVs by providing their domestic partners with capital protection and assured return guarantees varying from 12% to 24% p.a. That has resulted in domestic partners minting money at foreign partners’ expense while contributing little other than liquidity.

Case Study:A. Learn from best practices in the world’s most competitive, large insurance markets:

especially the US, EU, Canada, Australia, South Africa and China.

5. Liberalise pensions markets: Allow 51 percent investment by foreign pension fund managers

Strengths and Opportunities:A. It will make the Indian pensions market’s capacity more robust to meet future long-term

pension obligations (public and private) stretching out for durations over 40-50 years for post-retirement income needs.

B. The entry of professional foreign pension fund managers (FPFMs) would transform a PF industry in India that is incompetent, moribund and dysfunctional in meeting India’s needs for long-term capital, mobilized through employment-related structured involuntary savings products/plans related to salaried/earned income during working life.

C. It will make Indian Pension Fund Managers more efficient, cost-effective and competitive (domestically and globally).

Weaknesses and Threats:A. There will be resistance from vested interests of GoI, NPF, public sector employee unions,

and the political class.B. There will be concerns that PFs may not meet the priority needs of the poorest for proper

future pension protection for the basic post-retirement income. That issue is proving to be as false a concern in the case of PFs as it is with insurers and banks.

C. There will be fears that opening the entry of India’s PF market to FPFMs will make pensions more risky, more vulnerable to market competition and disenfranchise the poor.

How to get it done:A. Privatize and break-up NPF (which today does not earn adequate ‘real’ returns to meet

future pension payout obligations) and other public sector run PF schemes.




B. Pass the new Pensions Bill with a 51 percent limit for FDI than the current bill proposes.

Case Study: A. Learn from best practices in the world’s most competitive large PF markets especially those

of the US, UK, continental EU, Canada, and Australia.

6. Liberalise corporate bond market: integrate it with currency and derivatives markets

Strengths and Opportunities:A. Prioritizing rapid development of the debt/bond market, and opening it to greater

participation by corporates, PFs and private insurers, would make the entire Indian financial system more efficient, globally competitive, and release a greater quantum of better quality (in tenor) resources for productive investment (especially in infrastructure).

B. It would impose greater market discipline over public spending which is currently rampantly populist resulting in sustained resource misuse.

C. Opening up the debt market would provide market based opportunities for long-term borrowing on equal terms by corporates and long-gestating infrastructure projects. It would permit participation by sub-sovereigns (i.e. states) and metro-municipalities for financing public infrastructure needs.

D. It would enable market forces instead of government/political diktat to discipline public and private capital investment/spending proclivities with more efficient outcomes.

Weaknesses and Threats:A. Opening up the debt market on an equal footing to all borrowers would threaten the position

of government as a privileged preferred borrower and increase its borrowing costs, with a negative fiscal impact.

B. Populist politicians and other vested interests that benefit directly and indirectly by the undue influence that government has over financial markets, PSBs and PSIs will oppose it.

How to get it done:A. Apply FSLRC’s (Financial Sector Legislative Reforms Commission) recommendations to

changing debt market access/entry laws and regulations. B. Remove the preferential position of government as a preferred borrower through pre-

emption.C. Abandon SLR (Statutory Liquidity Ratio) and CRR (Cash Reserve Ratio) as monetary

control instruments by RBI. Resort to less primitive, debt-market focused liquidity and monetary demand-supply management operations through better structured instruments.

D. Permit private companies, banks, insurance companies, etc full unrestricted access to open debt markets providing they meet proper quality tests as borrowers of sound standing, and are rated transparently by domestic and foreign rating agencies.

E. Encourage the sub-sovereign and municipal bond markets to develop gradually under tightly controlled conditions with stringent market surveillance over the financial operations of states and metros.

Case study: A. Study and learn from how public, corporate, sub-sovereign and municipal debt securities

markets have evolved in the US, UK, EU, Japan, Canada and Australia at a similar phase in their economic development. Apply the lessons learnt to India.





7. Open up the derivatives market by ending RBI and Finance Ministry controls to provide for

investment risk-hedgingStrengths and Opportunities:

A. Allowing the derivatives (i.e. futures, options, swaps, CFD) market to evolve as it has in most developed countries, without repression by RBI and MoF, would result in greater financial market cost-efficiency reflected in reduced spreads and much better managed risks for investment portfolios and corporate as well as public treasuries.

B. Prioritizing rapid development of the derivatives market, and opening it to greater participation by banks, corporate treasuries, PFs and private insurers, would make the Indian financial system more efficient, globally competitive, and allow for better risk management in India by domestic investors as well as FFIs.

C. It would provide greater market based opportunities for an expanded range of long-term financing options (whether debt, equity, quasi-equity, cocos, warrants and convertibles) that were appropriately risk-hedged and managed on equal terms by all users of capital resources.

D. A larger, deeper, better functioning derivatives market would dampen open positions that are implicitly speculatively risky in financial securities as well as in commodities.

Weaknesses and Threats:A. Opening up and liberalizing the derivatives market might threaten the instinctive command-

control proclivities of government, MoF and RBI, and raise contentious conflicts with other ministries involved in the physical production, storage and pricing of key commodities.

B. The highly limited knowledge of bureaucrats, ministers, politicians and other vested interests that do not understand how derivatives markets and instruments work, and regard them as over-leveraged and dangerously speculative, will affect adversely the liberalization dynamic and process.

How to get it done:A. Apply the Mistry Report’s recommendations on liberalizing and enhancing derivative

market capacity. B. Prevent RBI from blocking essential derivative market evolution by shifting all market

regulatory powers to SEBI.C. Permit qualified foreign derivative market dealers open entry into the Indian derivatives

market and permit them to introduce whichever contracts they wish to in order to meet market demand providing that both dealers and contracts meet stringent quality tests (which did not happen when MCX and NSEL were permitted to open).

D. Permit private companies, banks, insurance companies, etc. full unrestricted access to open derivatives market operations to hedge their positions and provide essential market liquidity as position-takers (i.e. options and futures contract underwriters) as long as they meet proper quality and capitalization tests as entities of sound financial standing whose margin positions and capital commitment are monitored in real time by SEBI.

E. Encourage the gradual progressive integration of Indian derivatives markets with derivatives markets in other major financial centres, in particular Singapore, London and Chicago.

Case Study:A. Study and learn from how derivatives markets have evolved in the US, UK, EU, Japan,

Canada and Australia from 1980 onwards. Apply the lessons learnt to India with appropriate adaptation.




8. Restore macroeconomic balance: Commit to a reduced fiscal deficit of 3 percent of GDP in 36 months

Strengths and Opportunities:A. Excessive government spending and borrowing distorts the Indian financial market.B. More resources need to be freed up for use by the more efficient private sector.C. It will enable Indian financial markets to be globally competitive.

Weaknesses and Threats:A. It is politically tough to slash subsidies.B. Every government wants to retain huge centrally-sponsored welfare programmes.

How to get it done:A. Enact a new FRBM law; pledge to stick to it.B. Announce a time bound phase out of non-merit subsidies in the first Budget.C. Widen tax base and lower rates to increase government revenues.

Case Studies:A. Canada is one of the successful case among the G7, going from the second-largest net

debt-to-GDP ratio in the 1970s to the lowest one beginning in the late 1990s. The 90s plan involved a major restructuring of spending, including reforms of unemployment insurance, transfers to provinces, and pensions.

B. In New Zealand, farm subsidies were repealed in 1984. Almost 30 different production subsidies and export incentives have been ended.

C. At present, London, New York and Singapore are the major global financial centres. Many emerging IFCs around the world are aspiring to play a global role in the years to come: e.g. Shanghai and Dubai.

9. Permit full convertibility of rupee on the capital accountStrengths and Opportunities:

A. It is the one step that will truly help integrate India with global financial markets.B. It would help Mumbai become a major global financial centre, creating wealth and jobs.C. It will be good for Indian business which is expanding overseas.D. It would attract more inward investment.E. It will benefit Indian residents who can vote with their money if the government is profligate.F. It will discipline the government’s fiscal deficit.

Weaknesses and Threats:A. If the macroeconomy is mismanaged, then it could precipitate a crisis.B. Government will resist any measure than enforces fiscal discipline on it.

How to get it done:A. The internationalization of the rupee is an idea whose time has come. Mobilise public

opinion around it.B. As long as there are strict commitments to rein in government spending, any potential

adverse effect can be minimized.

Case Studies: A. Between1971–90 the Bretton Woods regime was replaced in all OECD economies by the

new stable regime based on floating exchange rates and open capital accounts.





B. The renminbi has been convertible on the current account since December 1996. The 1997 region-wide crisis thwarted Beijing’s endeavor of achieving full convertibility by the turn of the century. Since then, Chinese technocrats have made a series of promises regarding capital account liberalization. For instance, in January 2011 the State Administration of Foreign Exchange announced that the currency would be fully convertible within five years.

10. Implement recommendations of the Financial Sector Legislative Reforms Commission which streamlines and

harmonises the legal framework for Indian financial marketsStrengths and Opportunities:

A. Most of India’s financial laws predate economic liberalization. These need to be amended. B. The FSLRC has already done extensive research and provided a roadmap for a unified

financial code.C. The composition of the FSLRC was of experts and it is not politically partisan.

Weaknesses and Threats:A. Radical reform will be resisted by various vested interests which benefit from the current

system of laws.B. A new government may be tempted to reject the recommendations of the FSLRC because

it was set up by the previous government.

How to get it done:A. In the first Budget, announce a commitment to implement the recommendations of FSLRC;

that will end all uncertainty on its fate.B. Lay out a roadmap of 36 months in which various recommendations of the FSLRC will be

implemented in stages.

Case Studies:A. FSLRC has already looked in detail at how financial system regulatory reforms were carried

out in the US, UK, Canada, Australia and other countries in the periods of the 1990s and after the 2008 crisis. The lessons learnt have been evaluated and understood. They need to be applied.

B. For further study, the way financial reforms have been conceptualized and implemented in China also needs learning from with appropriate adaptation to accommodate Indian circumstances – which are not as unique as many believe.




FOREIGN POLICY





1. Over 5 years, increase capital expenditure on defence from 1.1 percent of GDP to 3 percent of GDP

Strengths and Opportunities:A. India’s armed forces are woefully short of modern equipments.B. Recent accidents in the Air Force and Navy prove that the need to upgrade equipment

is at an emergency stage. Hostile countries will not take India’s defences seriously until the situation is rectified.

C. Overall, India has a respectable defence spending figure of 2.4 percent of GDP, but this masks the fact that most spending is on salaries, establishment costs and other current expenditures.

Weaknesses and Threats:A. The Budget allocates defence spending under one head combining capital and current.

With One-Rank-One-Pension and the impending Pay Commission, there is a risk that an increase in overall defence spending does nothing to increase capital expenditure.

B. Fiscal pressures over the next few years will mean that the government will have to cut expenditure elsewhere to increase defence spending.

How to get it done:A. Announce the intent to increase capital spending in defence in the first budget. Outline

a roadmap.B. Appoint an effective defence minister who is able to take quick decisions on acquisitions.C. Allow private sector and FDI in defence so that costs of acquiring equipment come

down.

Case Studies:A. According to SIPRI 2013 Yearbook, world military expenditure in 2012 was estimated

around $1756 billion, representing 2.5 per cent of global gross domestic product (GDP) or $249 for each person in the world.

B. Military expenditure in Asia and Oceania rose by 3.3 per cent in 2012. Large increases were seen in Vietnam, where tensions with China are prompting major naval purchases, and in Indonesia. Spending in India decreased by 2.8 per cent.

C. China, the second largest spender in 2012, increased its expenditure by 7.8 per cent ($11.5 billion) in comparison to the preceding year in real terms. Russia, the third largest spender, too increased its expenditure by 16 per cent ($12.3 billion) during the same time period.

2. Expand Indian Foreign Service: allow lateral entry; Encourage specialization in economic issues

Strengths and Opportunities:A. Our diplomatic corps – 930 IFS officers - is small for a country of India’s size. Brazil

has 1200, China has 4000, Japan 5500 and the US has 20000. India has only marginally more diplomats than tiny Singapore which has 867 (all 2013 statistics).

B. India has reasonably-sized missions in the neighbouring countries and the P-5 countries but lacks sufficient representation in Africa, Latin America, and emerging East Asia which contain some of the fastest growing economies in the world.

C. The IFS tends to be insular and immune to influence from outside its cadre. Lateral entry can bring fresh thinking.

D. The IFS has traditionally been geared to “old-style” political diplomacy. It needs to




have a new focus on economic issues.

Weaknesses and Threats:A. The IFS will resist lateral entries.B. There is a risk that instead of lateral entries, recruitment at entry level will go up.

How to get it done:A. Aim to increase the size of the diplomatic corps by 50 percent to 1,400 personnel in

three years.B. Do not permit additional recruitment at entry level. All additional personnel should be

drawn from the ranks of lateral entrants.C. Change the mindset of the MEA; postings in economic divisions (including energy) or

to countries in Africa and East Asia should be considered prestige postings.

Case Study: A. Brazil recruited 400 diplomats over a period of two years (2009-2010) to meet its rising

global aspirations.

3. Restructure the intelligence agencies: increase coordination between agencies and make them accountable

to ParliamentStrengths and Opportunities:

A. In an era of asymmetric warfare, the role of intelligence is crucial.B. India’s intelligence apparatus is fragmented; the IB reports to the Home Ministry, the

RAW and NIA to the PMO, and Military Intelligence to the Defence Ministry. State intelligence agencies report to respective state governments. There needs to be a formal coordination mechanism.

C. Intelligence agencies escape accountability under the garb of secrecy. That needs to change.

Weaknesses and Threats:A. Each agency will protect its own turf and will be reluctant to coordinate.B. There will be a resistance to disclose information to Parliament.

How to get it done:A. The National Security Advisor or the National Security Advisory Board could be the

one-point coordination agency for all other intelligence agencies. That would enable a loop-in to the foreign policy establishment.

B. While all operational details need not be disclosed to Parliament, an account of spending and an audit of performance by a Parliamentary Committee is essential.

Case Studies:A. Australia has five agencies focused on foreign intelligence. There are three collection

agencies (ASIS, DSD and DIGO), and two with an assessment role (ONA and DIO). ASIO, Australia's security intelligence agency, incorporates collection and assessment, as well as policy formulation and advice. The clarity of the role played by each agency in the Australian intelligence community, along with the minimal duplication of capability, is one of the strengths of the Australian system.

B. In the United States, the Parliamentary Oversight Body reviews all intelligence agencies, approves top intelligence appointments. It checks both legality and effectiveness of the





services.C. In South Africa, the Parliamentary Oversight Body purview includes legislation

activities, administration, financial management and expenditure of the services.

4. Act tough with Pakistan: revive covert operations ability; Create economic deterrents; Ask Pakistan to reduce its

mission size in IndiaStrengths and Opportunities:

A. Pakistan will not stop sponsoring cross-border terror until India can signal its ability to cause harm.

B. A full war is an impractical idea, not in India’s interests, but covert operations can be used to damage Pakistan-based terror outfits.

C. Pakistan’s textile industry depends heavily on Indian cotton; India must leverage this and other economic interests (including in energy) to put pressure on Pakistan.

D. Pakistan’s large official establishment in India is known to create mischief.

Weaknesses and Threats:A. There will be a section of strong opinion which will favour a dovish approach to

Pakistan.B. India’s own ability to launch covert operations is limited at the moment.

How to get it done:A. Assign special units of the intelligence services and military to train for covert operations.B. If Pakistan allows any terror attack from its soil, impose crippling economic sanctions.C. Ask Pakistan to reduce its mission size to a bare minimum level, Head of Mission plus

two diplomats, down from Head of Mission plus 20 diplomats. India will not suffer if asked to do the same in Islamabad.

Case Study: A. The CIA covert program in Colombia provided for the battle against the 50-year-old

Revolutionary Armed Forces of Colombia (FARC) and a smaller insurgent group, the National Liberation Army (ELN). The previously undisclosed CIA program was authorized by President George W. Bush in the early 2000s and has continued under President Obama, according to U.S. military, intelligence and diplomatic officials. The program is classified.

5. Aggressively expose Sino-Pakistan nexus in international forums like the UN and with countries like the US and UK

Strengths and Opportunities:A. Pakistan draws its real strength from the tacit and explicit support of China.B. India must expose this nexus and its role in giving seed to global terror; ironically,

Pakistan has been more successful in projecting its stand on Kashmir in international forums over the decades.

Weaknesses and Threats:A. India is hesitant about taking on China in international forums.B. There are constituencies in the US and UK which explicitly support Pakistan and China

rather than India.




How to get it done:A. Put this towards the top of the agenda in bilateral relationships with a range of countries.B. Lobby important countries which have interests aligned with India, like Japan, to

support the cause.

Case Studies:A. In September 2013, India's External Affair Minister Salman Khurshid expressed

concerns over strengthening China-Pakistan nuclear cooperation ahead of Indian Prime Minister Manmohan Singh’s scheduled visit to Beijing in October 2013. Indian leadership also raised the issue during Chinese Premier Li Keqiang’s visit to India in May, 2013.

B. In January 2014, India and Japan decided to "further consolidate and strengthen their strategic and global partnership" in the defence arena through measures ranging from regular joint combat exercises and military exchanges to cooperation in anti-piracy, maritime security and counter-terrorism.

C. India is already responding by strengthening its strategic links with Afghanistan, Tajikistan, Mongolia, Vietnam, and Burma—countries on China’s periphery.

6. Bring Tibet into bilateral dialogue with China; Ask for Tibet’s historical independence

Strengths and Opportunities:A. Tibet and Xinjiang are China’s weak spots internally. India must exploit these.B. It will send a signal that India will raise issues that China might see as its “internal”

affairs as long as China meddles in India either via Pakistan or through direct incursions.

Weaknesses and Threats:A. India has already conceded too much ground on Tibet to China.

How to get it done:A. Use Tibet as a bargaining chip in border negotiations with China.

Case Study: A. In 2009, China vetoed a development plan for India by the latter in Arunachal Pradesh

and internationalized a bilateral territorial dispute. In response, New Delhi has kept Beijing out of India-led multilateral frameworks such as the India-Brazil-South Africa Dialogue, and the Mekong–Ganga Cooperation forums, and declined China’s request to be incorporated as observer or associate member into the 33-member Indian Ocean Naval Symposium, started by India in2008.

B. Invest heavily in roads along the China-India border

7. Invest heavily in roads along the China-India borderStrengths and Opportunities:

A. Lack of infrastructure in border areas means that India is under-prepared for even low-intensity conflict, including temporary incursions.

B. China has first rate infrastructure on its side of the border.C. Apart from serving a military purpose, better roads on the mountainous border terrain

will boost local economic activity, particularly tourism.





Weaknesses and Threats:A. It will involve a huge cost.B. The terrain is difficult.

How to get it done:A. End the monopoly of the Border Roads Organisation. B. Allow competitive bidding of road projects.C. Devolve finances to the concerned state governments to construct roads on a war

footing.Case Study:

A. Since the September 11 attacks, both Canada and the United States have invested heavily in border security. The two countries have worked together on trade facilitation, trusted-traveler programs, and border infrastructure projects that support border security while facilitating legitimate trade and travel.

8. Sign defence pacts with China’s East Asian rivals; Begin with Vietnam

Strengths and Opportunities:A. There is deep concern about China’s growing military muscle in the East Asia region.B. Given India’s fiscal constraints, it is unlikely to be able to match China’s defence

spending in the near future. Alliances are the only way to form a credible deterrent.

Weaknesses and Threats:A. China will view such defence pacts as a threat and try and stall them.B. India will have to overcome its superpower pretensions and ally on equal terms with

smaller countries.

How to get it done:A. Vietnam, like India, has border disputes with China. India can forge common interests

with it.B. Japan is also weary of China’s military intentions. India can forge a closer defence

alliance with Japan.

Case Studies:A. In 2013, India offered a $ 100-million credit line to Vietnam to purchase military

equipment including four patrol boats. The two countries have long enjoyed strategic ties that include cooperation in the civil nuclear sector, training slots for Vietnamese military officers and frequent exchange of visits.

B. In 2013, India and Singapore reaffirmed their strong and long-standing defence ties as they renewed a bilateral agreement for the conduct of joint army training and exercises for another five years.

9. Regain lost influence in India’s neighbourhood; Adopt a carrot and stick approach

Strengths and Opportunities:A. India has lost influence in recent years with traditionally friendly countries like Nepal,

Bangladesh, Sri Lanka and Maldives.B. China has been pumping large sums of money into these countries, largely through




government agencies. India needs to step in by leveraging the strength of its private sector.

Weaknesses and Threats:A. Some neighbouring country governments are openly hostile to India.B. The Government of India cannot match the Chinese Government’s spending power.C. The use of “sticks” to bring errant neighbours in line requires strong, decisive

leadership.How to get it done:

A. Incentivise the private sector to invest in neighbouring countries. Use diplomacy more aggressively to further India’s private sector interests.

B. In instances like Maldives where Indian interests are being openly defied, India needs to display a show of strength; India could have sent troops or organized Air Force sorties over the capital (visible ‘sticks’).

C. In some cases like Bangladesh, the central government needs to co-opt the support of the concerned state government (like West Bengal) to meet foreign policy objectives in the neighbouhood

Case Study: A. South African firms conducted about 70% of intra-regional investment flows, and

South Africa accounted for 71.5% of the region’s GDP in 2009. South Africa is also the largest food exporter within the region. Investment from South Africa’s private sector to neighboring countries is the key to economic growth to the region.

10. Revitalise the Indo- US relationship: forge common interests on Af-Pak region, Iran and on bilateral economic issuesStrengths and Opportunities:

A. After the high of the nuclear deal in 2008, Indo-US relations have stagnated. After the recent diplomatic fracas over an Indian Deputy Consul General in New York, the relationship may have deteriorated. There is plenty of scope for revival.

B. India and the US, both democracies and free market economies, have naturally aligned interests.

C. On Af-Pak and Iran, there is huge scope for forging common interests.

Weaknesses and Threats:A. The relationship has been ignored for some time.B. Some of the sticky bilateral economic issues are difficult to resolve.

How to get it done:A. India should pitch for an active role in Afghanistan post the US troop withdrawal at

the end of 2014. This need not be a military role.B. India could act as an informal mediator between the Iran and the US as those two

countries attempt a rebuilding of ties severed since 1979.C. The idea of a free trade pact or a bilateral investment treaty with the US must be

pursued provided India’s interests, particularly on labour mobility, but also on non-tariff barriers on agricultural goods, are addressed.

Case Studies:A. India has played an important and constructive role in the post-Taliban regime. The

Indo-Afghan trade too swelled fast, and of late, Indian investment has started finding its way into the country. India also provided economic assistance in form of outright grant nullifying any burden of repayment.





B. In March 2014, business delegation from the United States has pledged to invest $250 million in India over the next 6 to 12 months, a move anticipated to boost Indo-US trade ties.




HEALTH





1. Double Government Expenditure on Health from just under 2 percent of GDP to 4 percent of GDP in five years:

Use additional funds innovativelyStrengths and Opportunities:

A. India’s Government spending on the health sector is well below world average. It is also below the average level of most emerging economies.

B. The Health sector faces a resource crunch. Given India’s population numbers and per capita income, private sector alone cannot meet the demand.

Weaknesses and Threats:A. The additional funding may be sunk into non-performing Government schemes and non-

performing Government hospitals.B. From a political economy point of view, putting money into heath is always less attractive

than giving freebie subsidies.How to get it done:

A. Explore Public Private Partnership options beyond giving government land to private hospitals. A combination of Government financing and private delivery could work for India.

B. Rationalise existing Government schemes in health. Try and consolidate into one or two (urban/rural) schemes.

C. Consider a National Health Insurance scheme where the genuinely needy will be subsidised by the Government.

Case Studies:A. Many developing countries like Malaysia, Indonesia and Cuba provide virtually free,

quality healthcare to their peopleB. Hong Kong's universal health care system involves heavy government partaking despite

being considered as the freest economy. Public hospitals account for 90 percent of in-patient procedures, while the private options are used mostly by the wealthy.

2. Create an incentive system for transfer of health-linked funds to states

Strengths and Opportunities: A. Health is a state subject but states need funds from the Centre.B. By offering more funds to states which show better improvements on various health

parameters, there will be a healthy competition between states; standards will improve.Weaknesses and Threats:

A. Some states will resist on the ground of equity.B. There is a danger that the ruling party at the Centre could use this to discriminate against

states which are run by opposition parties.How to get it done:

A. Constitute a committee to evolve a transparent criteria and formula for transfer of funds.B. To reduce resistance from laggard states, link the transfer of funds to delta improvements

under different parameters. The starting point should be less important. C. The Finance Commission could be asked to explore the mechanics of such a transfer of

funds.D. Reach out to regional parties to evolve a consensus.

Case Studies:A. The Canadian constitution makes health a provincial responsibility, but, regardless of

provincial variations, the federal government's sizeable share in financing means that all Canadians get similar free access to doctors and to a nationally determined range of hospital




services, regardless of their province.B. Finland and Sweden combine old traditions of health policy implementation by several

elected local governments with strong national standard setting and redistributive spending by the central state. In principle Sweden’s decentralised system permits local government to tailor reforms that handle the delicate balance between efficiency, equity, and political accountability.

3. Train a new category of para-doctors: college graduates with two years medical training who can treat basic diseases Strengths & Opportunities:

A. India’s over-burdened doctors will be relieved by the development of a new paramedical specialty.

B. Most common diseases can be treated by para doctors. They do not need super-specialty.C. Training and strengthening primary and secondary health care providers in managing

common problems will allow tertiary care centres to focus on more complicated diseases.D. It is a good way to bring “quacks” into the mainstream by offering them two year training.

Weaknesses and Threats:A. For now, medical education is mostly based in a tertiary care setting and is provided at

academic medical colleges. B. A new curriculum will need to be developed and appropriately qualified teachers will need

to be found.C. It will therefore entail a cost.

How to get it done:

A. Use non-medical institutions of higher education to introduce the para-doctors course.B. Ensure devolution of responsibility for health care to district management systems along

with accountability mechanisms and explicit community participation.C. Encourage para-doctors by offering good salaries and other incentives to branch out into

rural areas.Case studies:

A. The University of California Riverside School Of Medicine, which enrolled its first 50 students last year, will train physicians who will remain in the community, where there is a shortage of doctors.

B. Central Michigan University College of Medicine, is relying on financial incentives to help it address the physician shortage. 80% of the students in its inaugural class of 64 last year grew up in remote and rural areas of Michigan, and much of the training takes place in the community.

C. Among the Indian states, Kerala has the best coverage of medical care facilities in the rural sector. Even the remotest places and tribal hamlets have access to basic medical facilities, which makes the state different. In Kerala, the doctor-patient ratio of 1:700 is on par with most of the European countries.

4. Commitment to build an AIIMS-like super specialty teaching hospital in every state

Strengths & Opportunities:A. It will augment facilities for quality medical education & specialist healthcare facilities in

the country.B. It will help correct regional imbalances in the availability of affordable and reliable tertiary

healthcare services.C. It will have positive spillover effects for other medical colleges and hospitals in states





which can affiliate to a top quality institution.

Weaknesses and Threats:A. Mushrooming private health care systems with vested interest will try to undermine the

efforts.B. Tackling the non-financial obstacles in service delivery (e.g. logistics, HR, and governance

issues) may be cumbersome.

How to get it done:A. Increase budget allocation for healthcare facilities including setting up of more AIIMS- like

institutes and tertiary care hospitals (specialty or super specialty) in the states to facilitate Right to Health, Right to have free quality health care to all.

B. The Union Health Ministry must upgrade existing government medical colleges, with the aim of providing adequate service and resource people to deliver health care.

C. Facilitate greater autonomy and faster execution of the projects and also expedite release of funds from the government.

D. Promote usage of public health facilities not only for emergency and referral purposes, but for other types of cases.

Case studies:A. Six All-India Institutes of Medical Sciences-like institutes approved under the Pradhan

MantriSwasthyaSurakshaYojna (PMSSY) are already coming up in different states.B. The French system is one of universal health care largely financed by government national

health insurance. Around 77 percent of health-care costs are covered by the state.

5. Restructure Union Health Ministry: create a separate department manned by experts to focus on TB, Malaria and

HIV the three biggest killer diseases in IndiaStrengths and Opportunities:

A. Health Ministry is spread too wide. A separate department focused on tackling just three diseases will lead to more effective policy action.

B. It is the best way to laterally induct doctors and public health officials into policy making.

Weaknesses and Threats:C. A. It will be resisted by the IAS and other career bureaucrats.

How to get it done:A. Use the role model of the National AIDS Control Organisation (an autonomous body

under the Health Ministry) which has been reasonably successful in advocacy on AIDS prevention.

B. The new department head can be at the level of Additional Secretary, who will report to the Health Secretary but will have considerable autonomy in functioning. That will reduce IAS resistance.

C. Ensure that the selection process for positions in the new department is transparent and attracts the best talent whether from government hospitals, private hospitals or NGOs.

Case Studies:A. The 20th century saw the eradication of malaria in the US, southern Europe and several

Asian countries following multi-pronged efforts to reduce vector breeding and parasite transmission.

B. Deaths from HIV have been brought down to negligible levels in the West. India has done a reasonable job in tackling HIV, but not TB and malaria.




6. Restructure Government hospitals: contract out all non-core services (cleaning, security, canteens etc); in particularly

dysfunctional hospitals outsource entire management on a non-for-profit basis

Strengths and Opportunities:A. Too many Government hospitals are run like large unwieldy Public Sector Corporations.B. Hospital administrators should spend all their time on medical issues. There are plenty of

firms in India which can manage the other non-core services.C. In the medium term, it will reduce costs as employees on the rolls of hospitals come

down. The freed up resources can be spent on doctors, nurses and equipment.D. Even dysfunctional hospitals have basic infrastructure like buildings and medical

equipment. These can be leveraged in the hands of better management.E. It will take time to build new hospitals. In the interim, given the wide gap between

demand and supply, this is one way to quickly inject some quality supply in the existing system.

Weaknesses and Threats:A. There will be opposition from employees’ unions.B. Hospital administrators will resist the loss of power and patronage.C. It will be resisted by incumbent management and other vested interests.D. It will be alleged that Government is giving out public assets to private sector.

How to get it done:A. Relocate non-essential employees to other institutions.B. Offer a generous VRS to non-core employees.C. Outsourcing should be done via transparent bidding process.D. Emphasise that the government is not relinquishing ownership, only outsourcing

managementCase Studies:

A. Wockhardt Hospital in Mumbai outsourced its payroll activity to Mafoi, a leader in handling HR solutions. Care Hospital, Hyderabad had also outsourced its payroll activity as a pilot initiative. Mumbai's Dr LH Hiranandani Hospital had a tie-up with the University of Sydney in Australia to train its nursing staff. Mumbai’s Jaslok Hospital too outsourced non-clinical services for cost reduction of in-house services for laundry, kitchen and housekeeping.

7. The Medical Council of India should have a 24 hour help line for receiving complaints which must be uploaded on the

web immediatelyStrengths & Opportunities:

A. It will create a centralized knowledge generation and information contact point with respect to healthcare best practices and registration of hitherto neglected complaints of malpractice.

B. It will improve information inflows and lower the costs of information exchange.C. Poor quality and inefficient delivery of public and private services would be addressed with

improved accountability mechanisms.

Weaknesses and Threats: A. Vested interests in the public sector and private sector who are not used to accountability

will resist.





B. Need to build a technical backbone.

How to get it done:A. Direct the Medical Council to set up the helpline and online database within 3 months.B. Launch a massive awareness campaign on the helpline number.C. Set up a wing in the Union Health Ministry which will monitor and respond to complaints

within a given timeframe.Case study:

A. The Maharashtra Medical Council (MMC) decided in 2011 to introduce an online complaint platform to help medical negligence victims ensure quick resolution of their issues.

B. Complaint about UK’s NHS can be made either verbally or in writing/email to the service provider such as GP, dentist, hospital or pharmacist. The National Health Service Litigation Authority (NHSLA) in the UK is a special health authority responsible for handling both clinical and non-clinical negligence cases on behalf of the NHS and brings out a fact sheet each year outlining details of claims cases.

8. Set up designated consumer courts which deal only with cases of medical negligence and spurious drugs

Strengths and Opportunities:A. India has laws against medical negligence but a painfully slow judicial process has rendered

them ineffective.B. It will help lift the standard of healthcare in both public and private sector.C. It will eliminate fly-by-night manufacturers of poor quality drugs.

Weaknesses and Threats:A. It will entail a cost in terms of setting up new courts and hiring more judges.B. It may raise insurance premiums for practicing doctors; they may resist.

How to get it done:A. Begin immediately by designating some existing consumer courts exclusively for health

and medical issues.B. Set up special tribunals (independent from judiciary) manned by experts in public health

which can hear cases of negligence and spurious drugs and impose penalties on wrongdoers.Case Studies:

A. In China, the health system established a regulatory outline to ensure an elementary level of quality service by village level doctors. Most Chinese provinces have created a licensing system whereby village doctors are required to take annual examinations. Local health departments also carry out periodic campaigns to crack down on clinics run by unlicensed personnel. But, these supervisory practices are often limited by lack of resources.

B. The South African National Consumer Protection Act (CPA) came into effect on 1 April 2011 aiming at promoting fair, open and good business practice between the suppliers and consumers of goods or services including healthcare services.

9. Creation of independent Technology Assessment Boards for rational deployment, and use, of drugs and technology

Strengths and Opportunities:A. The indiscriminate use of antibiotics is creating drug-resistant bacteria which could pose

a serious health crisis in India. A dedicated technical body is needed to address this crisis.




B. In the diagnostics sector, there is virtually no regulation of the technology used. A regulator needs to certify all diagnostic labs so that poor standard of equipment is not used.

Weaknesses and Threats:A. There is a risk that such a body could create a new licence raj.B. It will be resisted by drug-sellers and several labs which benefit from the under-regulated

system.How to get it done:

A. Set the body up at an arms-length from the Ministry of Health. It should be manned by technical experts only.

B. The Board must have subsidiary bodies in states. One board at the Centre will be insufficient to handle the load.

C. One of the mandates of the Board should be to create public awareness on these issues through outreach initiatives.

Case Study:A. The Telemedicine Consultation Centre (TCC) at a socio-economically backward district

of Mehaboobnagar in Andhra Pradesh deserves a special mention. The autonomy enjoyed by the Mehaboobnagar district hospital under a World Bank assisted project facilitated the state health authorities to enter into a public-private partnership to better the delivery of health services through a TCC.

B. In the UK, Health Technology Assessment broadly focuses on Clinical effectiveness and Cost-effectiveness. HTA has long been a policy priority in the UK. Since 1993, and the establishment of the National Coordinating Centre for Health Technology Assessment, the UK has had a highly active HTA research programme of international reputation. Over the last decade, three key policy-making ‘users’ of HTA have emerged in England, Scotland and Wales.

C. The European Medicines Agency is a decentralised agency of the European Union, and is responsible for the scientific evaluation of medicines developed by pharmaceutical companies for use in the European Union.

10.Announce a Central Government programme to construct public toilets on a war footing

Strengths & Opportunities:A. Low-cost and public toilet system has improved sanitation for millions and freed countless

scavengers from a life of cleaning human waste.B. It will prevent mortality of a million children who die each year from water and sanitation-

related diseases such as diarrhea, cholera and hepatitis.C. Reducing the toll of communicable diseases will raise labour force productivity and life

expectancy.

Weaknesses and Threats:A. It will entail a costB. There will be rivalry between Centre and State on who should get the credit

How to get it done:A. Use a Centrally-funded programme but implemented largely by the states (preferably

districts)B. Aim to have at least one public toilet per 500 peopleC. Set strict time deadlines for completion

Case Study: A. Sulabh International Social Service Organisation founded by Bindeshwar Pathak in 1970

spurred a 'toilet revolution' in India. It tackled the problem of sanitation related pollution leading to environmental degradation and health hazards. Sulabh International has planned to build toilets in 50 countries in Asia, Africa and Latin America.





INFRASTRUCTURE




1. Create a National Infrastructure Board (NIB) chaired by the Prime Minister and co-chaired by the relevant Chief Minister

Strengths and Opportunities:A. It will become a single window clearance for big-ticket infrastructure projects.B. It will ensure coordination between the central and state governments, both of whom have

multiple powers of clearances.C. It will inspire confidence among investors that project clearances are being made by the

executive heads of the government of India and state government.

Weaknesses and Threats:A. It can be criticized for over-centralization of authority.B. There may be resistance from some ministries in the centre and state which may fear loss

of turf.How to get it done:

A. Union Environment Minister must be a member of the NIB.B. Give the NIB access to government land banks to overcome difficulties posed by Land

Acquisition Law.C. Persuade state governments to join the Board; begin with CMs from the ruling party/

coalition.

Case Study:A. In New Zealand, the National Infrastructure Advisory Board consisting of members from

the private sector and outside central government was established to advise the National Infrastructure Unit and the Minister for Infrastructure on project appraisal, capital asset management issues and the development of the National Infrastructure Plan. A key role for the board is to engage with the private sector, local government and other stakeholders.

2. Separate policymaking and regulation; Set up independent sectoral regulators to monitor user fees and tariffs

Strengths and Opportunities:A. There is a conflict of interest in the same body doing policy formulation and regulation. B. Tariffs and user charges should be insulated from the compulsions of politics.C. Separation has worked well in some infrastructure sectors like telecom.

Weaknesses and Threats:A. Ministries will hesitate to surrender turf.B. There is a danger than independent regulators will come from the ranks of ministry officials

causing conflict of interest.

How to get it done:A. Set up independent regulators for Railways, Roads, Airports and Ports or a unified regulator

for transport.B. Ensure that appointments to regulatory bodies are based on expertise; avoid conflict of

interest.

Case Study:A. In the UK, the Utilities Act 2000 brought the regulatory tasks and goals of different

regulators under a single statute which streamlines the appointment and dismissal of regulators, their accountability to Parliament and the regulatory practices they adopt. UK





is also the first country to set up independent railway safety regulator. The Office of Rail Regulation (ORR) regulates Network Rail's activities and funding requirements, regulates access to the railway network, licenses the operators of railway assets and publishes rail statistics.

3. Merge the ministries of Roads and Highways, Railways, Civil Aviation and Shipping into an integrated ministry of transport

Strengths and Opportunities:A. It will enable the government to present a comprehensive, integrated transport policy.B. It is in line with the global best practices of having a unified ministry of transport.

Weaknesses and Threats:A. It will mean that the job of 4 cabinet ministers will be reduced to one.B. It will be resisted by politicians and the bureaucracy, particularly the Railways bureaucracy.

How to get it done:A. Announce the new ministry at the time of the swearing-in of the council of ministers.B. Appoint ministers of state to the individual departments within the ministry.

Case Study:A. Singapore’s Ministry of transport administers and regulates land, sea and air transportation

within the republic’s jurisdiction. The main focus of the ministry is to bring about efficient and cost effective transportation to enhance Singapore's economic competitiveness and quality of life.

4. Permit renegotiation/re-auctioning of PPP contractsStrengths and Opportunities:

A. Most infrastructure projects have a long gestation period. Global experience shows that if underlying conditions change, then PPPs must be renegotiated.

B. Some PPP projects may fail to function properly because of incompetence or graft. There should, therefore, be a provision to re-auction these rather than keep them stalled for long periods.

C. Despite problems, PPP is the only viable way to build India’s massive infrastructure needs.

Weaknesses and Threats:A. There is the threat of litigation, which could take long in India’s slow justice system.B. There may be allegations of favouritism or excessive concessions to the private partner in

the PPP.

How to get it done:A. Amend all PPP guidelines to include provisions for renegotiation/re-auctioning.B. Reignite public faith in PPP by conducting transparent re-auctioning of existing stalled

projects.

Case Studies:A. Many PPP projects have lent themselves open for renegotiation in India. For instance,

GMR and GVK have walked out of mega-highway projects. Delhi Airport has clamoured for resets. There are also problems brewing in the Gurgaon Expressway project. Tata Power and Reliance Power are struggling to transform their mega power projects powered by




imported coal into profit-making ventures due to changes in input costs.B. Chilean PPPs were launched in 1993 with the ElMelón tunnel concession. There had been

148 renegotiations of PPP contracts by 2007, and therefore each concession had been renegotiated three times on an average which led to an increase of $2.8 billion, or nearly one-third, in total investment, from $8.5 billion to $11.3 billion.

C. Peru has experienced modest renegotiation of concession contracts compared to other Latin American countries, partly due to its well-conceived concession, regulatory and institutional designs.

5. Enable easier finance for infrastructure: facilitate the development of a long term bond market, allow foreign pensions

funds and private equity funds by amending qualifications for investment in physical infrastructure

Strengths and Opportunities:A. Given the rising NPAs in the banking system, banks are unlikely to be able to fund sufficient

infrastructure projects.B. Bonds are the preferred method of financing of infrastructure globally.C. Foreign pensions funds and private equity will bring much needed resources.

Weaknesses and Threats:A. It will have to be incorporated into the wider and more controversial gambit of financial

sector reform.

How to get it done:A. Implement the recommendations of the Financial Sector Legislative Reforms Committee.

Case Studies:A. China has experienced more than 25 years of extraordinary economic growth due to

decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development. They are allowed to retain a large part of the fiscal revenues that are generated from economic activity.

B. Governments with cash to spare, like China and parts of the Middle East, often prefer to finance infrastructure projects directly, allowing them to maintain control.

C. Australia and Canada developed and implemented modest national infrastructure plans using well-thought-out PPP procurement approaches to help finance projects. Aging highway systems and urban congestion pose ongoing challenges, but both countries make progress in addressing their substantial needs, buoyed by relative fiscal calm.

D. International investors from the U.S., Europe, Asia and Australia have flocked to the Chilean market to develop both fossil fuel-fired and renewable energy projects.

E. In Latin America and the Caribbean, commercial lending institutions are actively looking for lending opportunities to well-structured infrastructure projects throughout the region. Multilateral lending institutions, such as the International Finance Corp. (IFC) help critical infrastructure projects find funding by introducing creative financing structures, which all also attract interest from the private lending community.





6. Restructure NHAI to convert it into ‘Mission Mode’; Upgrade Golden Quadrilateral from 6 lanes to 12 lanes

Strengths and Opportunities:A. Autonomy from the Ministry of Roads and Highways will increase the efficiency of NHAI.B. Experience shows that when government works in mission mode it delivers better outcomes.C. At 4-6 lanes Golden Quadrilateral is inadequate for India’s growing traffic requirements.D. A high-speed 12 lane network will have huge positive spill-offs by reducing transactions

costs of transport.

Weaknesses and Threats:A. The ministry/department of roads will be unwilling to surrender control over NHAI.B. Land acquisition issues will be a big hurdle to expanding highways.

How to get it done:A. Give full functional autonomy to NHAI.B. Appoint a professional from outside Government to head NHAI.C. Implement recommendations which allow renegotiation, re-auctioning of PPPs.

Case Studies:A. In Australia, Dual-carriage highways linking Brisbane, Sydney, and Melbourne are being

built.B. Trillions of dollars’ worth of infrastructure investment has transformed China into an

exemplar of modern urban transit, expansive highways, vanguard high-speed intercity rail, and highly efficient ocean ports. The longest high- speed rail route in the world—covering 1,200 miles in an eight-hour ride—opened between Beijing and Guangzhou in 2012.

7. Corporatise Indian Railways; Abolish the Railway Board; Allow private operators to run trains, stations

Strengths and Opportunities:A. In its present monolith form with over 1 million employees, it is difficult to make the

Railways efficient.B. Breaking it into regional corporate units and subjecting them to competition with one

another will improve services.C. Private competition will bring better services while maintaining reasonable prices.

Weaknesses and Threats:A. The bureaucracy of the Railway Board in Delhi’s Rail Bhavan will resist.B. If Railways remains a separate ministry, then the minister may not allow corporatization.

How to get it done:A. Abolish the Railway Board. Set up seven or eight regional units as corporate entities each

headed by a CEO.B. Some or all of these entities could be listed on the stock market as the government begins

to divest shares.C. Allow competition between the different regional units in providing inter-regional services.D. An independent regulator would be needed to monitor tariffs and ensure that competitive

practices are being adhered to.Case Studies:

A. British rail has evolved into a privately run public transport system playing a critical and successful role in the economy with passenger numbers booming, productivity rising and




the number of services soaring.B. New Zealand corporatised the railway in 1982 and privatised it as an integrated business in

1993, but in September 2004 the infrastructure was taken back into state ownership. C. In Australia, the Interstate network between the NSW border and Acacia Ridge Intermodal

Freight Terminal is leased to the Australian Rail Track Corporation. Heavy freight haul and the Central Queensland Coal Network are leased by Aurizon (formerly QR National), a privately owned corporation. Passenger rail services and the urban rail network are owned and operated the Queensland Government-owned Queensland Rail.

8. Build a high-speed Rail Network; begin with routes plied by the Shatabdi Express trains

Strengths and Opportunities:A. It will enable faster travel and bring greater convenience to travelers.B. It will boost the growth of Tier 2 and Tier 3 towns which are within a 250 km radius of big

cities by cutting town travel time significantly.

Weaknesses and Threats:A. It will entail a high cost.B. It will be a challenge to deliver cost effective services to consumers.

How to get it done: A. Start with a pilot project, possibly Mumbai-Ahmedabad.B. Expand it to routes currently plied by the Shatabdi Express trains.C. Raise finance through the bond market.

Case Studies: A. Britain is developing HS2 to provide railways with new capacity, better connectivity and

quicker journeys. HS2 will link 8 of Britain’s 10 largest cities, serving 1 in 5 of the UK population. It will allow more passengers to use trains and more freight operators to use rail rather than road.

B. China has announced doubling of its high-speed rail network by spending £60bn this year. The investment forms part of a project which represents the largest and fastest rail expansion programme in the world.

9. Build 50 new airports in big cities, Tier 2 and Tier 3 cities/towns; Abolish aviation fuel tax

Strengths and Opportunities:A. Air travel is still concentrated in the metros and larger cities.B. Better airport infrastructure in smaller towns will enable connectivity.C. Allow multiple airports (at least two) in big cities like Delhi and Mumbai so that competition

goes up and costs (for passengers and airlines) go down.D. High aviation fuel tax has made the Indian airline industry uncompetitive by global

standards.

Weaknesses and Threats:A. Airports Authority of India may resist PPPs necessary to expand airport infrastructure

rapidly.





B. Incumbent operators will resist a second airport in the same city.C. States make revenue out of ATF (Aviation Turbine Fuel), so will be reluctant to abolish it.

How to get it done:A. Encourage private investment, independent of AAI (Airports Authority of India), in building

modern greenfield airports in smaller cities and towns.B. Give existing operators in big cities the right to first refusal for second airport.C. Abolish ATF as part of a grand deal on GST (Goods and Services Tax). Only the new GST

rate will apply to ATF. Compensation to states for any revenue loss from abolition of ATF should be built into the GST grand deal.

Case Study:A. In 2012, China announced building of 70 new airports in three years. In all, the current

Five Year Plan calls for 55 new civil airports by 2015, bringing China’s total to 230.

10. Privatize major public sector portsStrengths and Opportunities:

A. The largest ports are still publicly-owned and are inefficient by global standards.B. India’s most efficient port-Mundra- is privately owned.C. There is no economic logic for major ports to be in the public sector.

Weaknesses and Threats:A. There will be resistance from vested interests.B. Labour unions will also resist.

How to get it done:A. Identify 2 ports which can be fast-tracked for privatization in 12 months.B. Offer generous VRS to employees.C. In some cases, move to public-private partnerships

Case Studies:A. In June 2013 the Government of New South Wales in Australia announced that it would

sell the Port of Newcastle to fund significant infrastructure projects.B. Major ports in Malaysia, Thailand and the Philippines cannot be considered purely public

ports after allowing private sector participation in their ownership and operation.




INVESTMENT





1. A commitment to reduce the fiscal deficit and revenue deficit by 0.5 percent per year

Strengths and Opportunities:A. The high fiscal deficit is crowding out the more productive private sector from financial

resources.B. A commitment on lower deficits would enable a looser monetary policy that would boost

investment.

Weaknesses and Threats:A. A sluggish growth rate means that it will be hard to raise revenues without the damaging

prospect of raising taxes.B. There is a risk that productive capital expenditure may be cut and not unproductive subsidies

and government consumption expenditure.

How to get it done:A. Introduce a new Fiscal Responsibility and Budget Management Act with the first Budget.B. Target non-merit subsidies, particularly in petroleum and fertilizers; institute a 36-month

reduction plan, @ 1-3% per month, to reach the optimum/permanent subsidy level.Case Studies:

A. Canada is one of the successful case among the G7, going from the second-largest net debt-to-GDP ratio in the 1970s to the lowest one beginning in the late 1990s. The 90s plan involved a major restructuring of spending, including reforms of unemployment insurance, transfers to provinces, and pensions.

B. In India, the fiscal deficit for 2012-13 was lower at 4.89 per cent of the GDP, considerably below the revised estimate of 5.2 per cent, due to larger than estimated mop-up by way of taxes coupled with higher non-tax collection.

2. Implement the Goods and Services Tax immediatelyStrengths and Opportunities:

A. It is estimated that the implementation of GST could add 1-1.5 percentage points to GDP growth per annum.

B. A unified single market in a big country is a big boost to economic activity.

Weaknesses and Threats:A. Some states will resist implementation because of fears of revenue loss.B. There is a danger of setting the rate too high which will deter investment and revenue

collections.

How to get it done:A. Offer a grand bargain in which the Center will over compensate any state that fears a loss in

revenue, i.e. instead of waiting to get it right in one go, start immediately with an “interim/evolving formula”, offer liberal revenue protection/make-up plans to states as per a sliding/benchmarked plan that can be periodically reviewed/re-benchmarked in the light of real data.

B. Set a reasonable rate, ideally 12% (Center and states combined).

Case Study:A. France was among the first countries to enact a common goods and services tax. Over 140

countries in the world have GST.




3. Issue a Pledge: In low and stable taxation and rule of law we believe

Strengths and Opportunities:A. Certainty and stability in tax regime is crucial for both domestic and foreign investors.B. After the Vodafone/Shell/Nokia cases, it is important to assure investors that there will be no

retrospective changing of laws, or opaque guidelines which can be arbitrarily interpreted, either on taxation or other rules of business.

Weaknesses and Threats:A. A high fiscal deficit may tempt a Government to be “extractive” on taxation.B. Populist politics finds it attractive to penalize foreign companies.

How to get it done:A. Implement an uncompromised Direct Taxes Code which lowers rates of taxation while

ending exemptions; ensure that the fine print is clear/unambiguous and thoroughly vetted by credible experts.

B. Issue a pledge not to raise tax rates in the first Budget.Case Studies:

A. Low Taxes and stable money are best exemplified by Hong Kong and Singapore. Both have modest tax rates. Prudent macroeconomic policy within a stable political and legal environment has been the key to Singapore’s continuing success in maintaining one of the world’s highest levels of economic freedom.

B. Decisive tax reforms in Sweden have made the corporate tax rate competitively low and have enhanced private-sector productivity. Sweden’s economic resilience has long been sustained by solid foundations of economic freedom. The rule of law is well maintained. Property rights and contract enforcements are very secure and expropriation is highly unusual.

4. Privatise PSUs, Increase Public Investment with the proceeds Strengths and Opportunities:

A. There are many PSUs which are clearly “non-strategic” and therefore should be low hanging fruit (e.g. the Telecom PSUs, Air India, ITDC).

B. Public sector investment as share of GDP was 9.4 percent in 2008-09. It had declined to 7.91 percent in 2011-12. Rebooting public investment is key to reviving growth.

Weaknesses and Threats:A. There is a danger of “disinvestment” replacing privatization. Minority stake sales are not

enough. Privatise non-strategic PSUs entirely.B. There will be resistance from employees’ unions in PSUs.C. The proceeds from privatisation may end up being used to finance Government consumption

expenditure.

How to get it done:A. Opt for a big bang approach rather than incremental approach; tackle the resistance in one

go.B. Offer generous VRS schemes to employees of bloated PSUs before privatisation; also offer

a grand-fathering/government-transfer/reskilling plan to those employees who are most opposed to privatisation, in such a way that they remain unaffected, and their costs are “written off” to the proceeds from privatisation. This may perhaps be the only way to neutralize large-scale opposition to a big bang plan.

C. Issue a commitment to use sales proceeds only for investment, not consumption.





Case Studies:A. Chile’s main telephone company doubled its capacity in the four years after the Government

privatized it. In New Zealand and Japan, state -owned enterprise reforms began to bite only when done in conjunction with privatisation.

B. Chicago's $1.8 billion lease of its Chicago Skyway toll road, $1.15 billion lease of its downtown parking meter system, and $560 million lease of four downtown parking garages are examples of the franchise approach of privatisation.

C. Centennial, Colorado privatised all of its public works functions in 2008. Bonita Springs, Florida privatised all of its community development services (planning, zoning, permitting, inspections and code enforcement) in 2008, and Pembroke Pines, Florida privatised its entire building and planning department in June 2009.

5. Remove FDI caps across the board; in select strategic sectors like defence, allow 24 percent domestic equity


A. The volatile Balance of Payments scenario and unstable FII flows are a good reason to encourage more stable FDI flows.

B. Foreign investors have lost confidence in the India story. Abolishing FDI caps across the board will re-establish confidence.

Weaknesses and Threats:A. In the midst of a slowdown, there will be resistance from domestic industry which will

clamour for protection rather than liberalization.

How to get it done:A. Identify a handful of strategic sector like defence where there can be a FDI cap of 76 percent.

Simultaneously, ensure that India-registered but foreign-owned entities are effectively brought under the gaze of Indian laws, so that overseas ownership cannot be misused.

B. Scrap case-by-case approvals. Move everything to automatic route. All documents that are currently required to be submitted to FIPB to make a case for the approval should be mandatorily listed on the companies’ website under an automatic approval regime.

C. Scrap local content requirements which have been deterrents in sectors like retail.D. Remove FII stakes in listed companies (that are widely held and traded on Indian/global

exchanges) from the definition of FDI i.e. FDI should only include direct foreign investments of a strategic nature which are held/operated under a strategic shareholding agreement.

Case Studies:A. Four of the top five recipients of foreign funds have been listed as developing economies

by the United Nations. They are China, Hong Kong, Brazil and the British Virgin Islands. B. New sectors of China’s economy are opening up for overseas investors and companies.

Deere & Company (NYSE:DE), the world’s largest agricultural machinery manufacturer, is investing in China, as the country strives to update and improve the agricultural sector to feed its growing population. Deere’s latest site, a 1.6 billion yuan ($250 million) investment covering 400,000 square meters, is in Harbin, the capital of Heilongjiang province, and encompasses R&D facilities and an assembly plant.

6. Diversify domestic sources of capital: introduce competition in banking and develop bond markets

Strengths and Opportunities:A. At present banking finance is relatively short in supply and very expensive.




B. Indian firms take risks by borrowing abroad. They would be happy to borrow in India if more options existed, particularly by raising bond finance.

Weaknesses and Threats:A. Public sector banks will resist competition.B. Foreign banks may only set up limited operations, focus on large firms and not reach out to

small and medium enterprises.C. Reform of the bond market has been on the agenda but doesn’t have any constituency

actively lobbying for it.

How to get it done:A. Issue new banking licenses immediately. Do not restrict number to a handful. Allow at least

10-15 new banks.B. Pass the Banking Reforms Bill which will rationalise voting rights for shareholders among

other measures; actively support M&A among PSU banks to allow them to gain global scale; allow some of the “less than optimal” PSU banks to be privatized.

C. Direct SEBI to submit recommendations, in 30 days, to increase depth of bond market.

Case Study:A. At around $4tn, China’s domestic bond market is the world’s fourth largest after the US,

Japan and France, and much larger than the Shanghai equity market’s $2.4tn. According to HSBC, China’s bond market is growing about 30 per cent a year.

7. Decentralise Approvals: Allow a single window at the state level


A. Multi-layered approvals processes are a major deterrent to investment.B. Centre should make policy but leave mechanics of approval to states.C. Logically, approvals should be nearest to the geography of actual investment.


A. It will be resisted by existing institutions at the Centre like FIPB.B. If one state government denies approval for a frivolous reason, it could potentially impact

investment (particularly FDI) in other states also.

How to get it done:A. Single-window clearance for investment in each state capital.

Case Studies:A. The Rajasthan government in 2011 launched the much-awaited single window system for

easy flow of investments into the state.B. The Punjab Government, for the first time ever, came out with a fixed deadline to roll out

‘single window clearance’ system for approvals to industrialists from various departments in October 2013.

C. Goa in 2012 invited leading companies to set up shop in the state by offering them single window clearance and ensuring transparency in government dealings.

D. Single Window model has been a success in Finland, Mauritius, Malaysia, Senegal, United States, and Singapore due to cooperation and commitment of all stakeholders- private and public. User-friendly system, which do not create complications for usual business procedures are also prevalent in China, Malaysia, Sweden, Senegal, and the United States.





8. Digitise processes related to registration and clearances; make time-bound clearances the norm rather than the exception

Strengths and Opportunities:A. It will bring transparency, increase speed and reduce human discretion.

Weaknesses and Threats:A. It will be resisted by the bureaucracy and vested interests.

How to get it done:A. Do aggressive benchmarking on each process, and ensure that the full status of each

approval’s “journey” through the bureaucratic process is disclosed/updated on a website, with supporting reasons for a delay (wherever applicable)

B. B. The government needs to draft a digitised flow chart for online clearances.

Case Studies:A. Colombia allows online pre-enrollment, making registration faster and simpler. B. Netherlands has merged many approvals and implemented online application and clearance

systems for businesses. C. UAE has innovated by creating a one window-one step application online system for getting

electricity and water. D. Costa Rica has a risk-based approach on sanitary approvals for start-ups and online approval

system for construction.

9. Revisit Public Private Partnerships: End the crony capitalismStrengths and Opportunities:

A. India needs $ 1 trillion in investment in infrastructure between 2012 and 2017. Public sector alone doesn’t have the resources.

B. Current PPP model is discredited because of accusations of crony capitalism and privatisation of profits and nationalisation of loss.

Weaknesses and Threats:A. It will disturb vested interests who have a stake in continuing the existing system.

How to get it done:A. Ideally those projects which have a commercial potential are best built, owned and operated

by private investors who then offer goods for a price or services for a fee ratified by an independent regulator. How they fund this, how much they produce and who they sell/offer to at what price cannot be a subject for ministerial micro-management.

B. Projects where commercial returns are not alluring should be best left to government to fully own and operate. At best, they can outsource competencies from the private sector for efficient construction. Even the operations can be outsourced through a bidding process.

C. Saga of annuity, concessions and revisions must end; projects which turn out to be unviable because of wrong tendering or bidding should be put up for a second auction in an open and transparent manner, so that these “stuck projects” don’t become critical bottlenecks; instead, their infirmities/unviability is openly recognised/disclosed, and the projects are re-auctioned under modified terms so as to remove the known infirmities and improve their viability.

Case Studies:A. PPPs in the UK have been highly successful with countries around the world trying to

emulate the UK model. The 101 million pound funded A55Llandegai to Holyhead trunk




road has been designed, financed and built by UK Highways A55, a consortium of Carillion Laing and Hyder and is the first trunk road built in Wales under the Private Finance Initiative.

B. Australia’s Sydney harbor Tunnel built on the PPP model with ownership of private sector led to significant alleviation of congestion in the area and proved to be successful.

10. Reform labour lawsStrengths and Opportunities:

A. Rigid labour laws are the single biggest deterrent to investment in manufacturing.B. India needs a robust manufacturing base to generate employment for surplus labour in

agriculture.

Weaknesses and Threats:A. It will be resisted by organized labour.

How to get it done:A. Have a grand-fathering clause which protects all incumbents from new labour laws, but

will apply to those joining the work force.B. Devolve the final say on labour laws to state governments; unified resistance will get

diffused.A. Mobilise opinion among unorganized labour who comprise 90 percent of the workforce,

compared to just 10 percent in the organized sector.

Case Study:A. China and Korea have made the transition to ‘labour market security’ by reducing restrictions

on retrenchment while introducing unemployment insurance and active measures. Korea eliminated the guarantee of lifetime employment in the late 1990s but provided strong active and passive policies to compensate.





MANUFACTURING




1. Declare Manufacturing priority number one for Government: Set up a Manufacturing Board chaired by PM

Strengths and Opportunities:A. Policies related to manufacturing are set by several Union Ministries; turf wars can be

damaging.B. All ministers should be on the same page when it comes to encouraging manufacturing, as

should Chief Ministers.C. Manufacturing Board can also be a point of interface between PM and Chief Ministers.

Weaknesses and Threats:A. Ministers and Chief Ministers will resent ‘encroachment’ on their turf.

How to get it done:A. Prime Minister must issue a Cabinet note outlining priority for manufacturing and circulate

it to his council as soon as he takes office.B. The Manufacturing Board should be convened every week by the Principal Secretary to

the PM. For big projects, it should bring together the relevant Cabinet Ministers and the appropriate Chief Minister. It is a great way to enhance Centre-State communication and cooperation.

C. To encourage states to participate, relevant Chief Minister can be co-chair (with PM) of the Board on any investment that concerns his or her state.

Case Studies:A. Between 1991 and 1996, the Foreign Investment Promotion Board (FIPB) fast-tracked

investment into a hitherto closed economy. The FIPB was chaired actively by then Principal Secretary to Prime Minister A.N. Varma.

B. In Germany, and Japan, business associations, government ministries, and stakeholders (especially labour unions) work together in institutionalized processes of consultation.

2. Set a target time limit for clearances: Should not exceed 125% of time taken in Singapore and China

Strengths and Opportunities:A. India ranks consistently poor on all global rankings of ease of doing business.B. An explicit benchmarking against best practices in India’s competitor nations will send out

a clear signal to manufacturers on intent of the Government.

Weaknesses and Threats:A. There will be resistance from the bureaucracy which draws its powers from the multiplicity

of clearances.B. There will be resistant from ministers who will seek to protect their decision-making turf.

How to get it done:A. Issue an executive order from the PMO setting the time limit.B. Set up a committee under Cabinet Secretary to rationalize clearance process; force ministries

to decide speedily.C. Ultimately, it would be appropriate for Centre to withdraw from clearances; there should be

a single window at the state level.Case Studies:

A. According to Doing Business 2012 data, registering a business in India requires 12 procedures, which takes 29 days. This is in line with other BRIC countries: registering a





business in China requires 14 procedures and 38 days; in Russia it takes 9 procedures and 30 days; and in Brazil it takes 6 procedures and 34 days. India was ranked 132 out of 183 countries on ease of doing business in 2012 data.

B. In Singapore, the application processing time is about 15 minutes from the time of successful online submission of all documents and information. The sole-proprietorship or partnership is usually registered within 15 minutes. However, it may take between 14 days to 2 months if the application needs to be referred to other authorities for approval or review.

C. In Gujarat, for starting a business, a time limit of three days is reportedly being achieved.

3. End all tax concessions and other regulations that incentivize companies to remain SMEs

Strengths and Opportunities:A. Almost 85% in India's manufacturing sector is located in enterprises with less than 50

workers, i.e., the Small to Medium Enterprises. These businesses and start-ups are the backbone of any developing economy as their energy; vision and innovation create jobs in the market.

B. Infusing growth will lead to consolidation of MSMEs which in turn will encourage small businesses to take on businesses from the larger players.

C. Small businesses will become more competitive and competent. Large companies can outsource some of their work to them, which in turn will help them increase revenue.

Weaknesses and Threats:A. There will be a political outcry of withdrawal of concessions to small businesses.B. Some small businesses satisfied with their state of being may resist.

How to get it done:A. Instead of offering tax concessions which incentivize SME’s to remain small, offer access

to cheap finance which will enable them to grow.B. Reform of labour laws and their application to mid-size and large firms will also incentivize

scaling up by small firms.C. Ensure Competition Law is not a hindrance to scaling up of manufacturing units.

Case Studies: A. The UK government’s report, Growing your Business: A report on Growing Micro

Businesses, highlights the increasing importance that growing micro businesses have on the success of the economy. Making up 95% of all businesses, it identifies steps the Government can take to help them develop their confidence and capability to grow, helping the UK to get ahead in the global race.

B. In Japan, virtually 99% of all businesses are small or medium-sized enterprises (SMEs). They employ a majority of the working population and hugely contribute to the economic output. Though these companies are not as recognized as Japan’s giants, they form the backbone of the service sector and are critical to the manufacturing and export supply chain.




4. On labour laws, get rid of the Delhi influence and change the Seventh Schedule

Strengths and Opportunities:A. India needs to get labour out of unproductive agriculture and into industry.B. Other countries have already begun to age, including China. Though 10 years of the

demographic dividend have been lost, there is a lot that can still be salvaged.C. There are alternative definitions and alternative sources of data on gross enrolment ratios.

Therefore, without giving specific numbers, the point is that gross enrolment ratios in primary schools have sharply increased across the Indian states. There are still problems with retention and high drop-out rates and quality of learning. However, there is greater demand for education (not necessarily the same as skills), even among the poor. This augurs well for increasing India’s labour productivity. After all, labour is something India has in abundance and per capita GDP is a surrogate indicator of the per capita productivity of the working age population.

D. There is plenty of entrepreneurship and entrepreneurial interest, precisely because India is young.

Weaknesses and Threats:A. It will be resisted by vested interests, particularly incumbent organized labour force.B. There is nothing automatic about a demographic dividend resulting in increments to GDP

growth, at least by the same magnitude. That requires education/skills, health, physical infrastructure, access to law and order and an enabling framework for growth. India doesn’t score well in any of these.

C. The labour market is stifled by controls. Ten years of the demographic dividend have already been lost. The young population has been born, or has grown up, in a post-liberalization era. If there is no growth, and there are no jobs, discontent becomes violent. The official “unemployment” rate of around 8% is misleading.

How to get it done:A. India is not a homogeneous country. The bulk of new entrants into the labour force are in

states like Rajasthan, Uttar Pradesh, Bihar, West Bengal, Madhya Pradesh and Maharashtra. There are states that are already facing labour shortages, especially in southern India. The labour surplus is in northern and eastern India. Different states are at different levels of development. Hence, unless it has something to do with safety or welfare, nothing to do with labour should be devised in Delhi. That is a disastrous template. Leave it to the states to decide.

B. Specifically, why should population control and family planning (Entry 20A), relief of the disabled and the uemployable (Entry 9), trade unions, industrial and labour disputes (Entry 22), social security and social insurance (Entry 23), welfare of labour (Entry 24) and education (Entry 25) be in the Concurrent List? They should all be moved to the State List.

C. There should be no union schemes in the labour area. Where there are already existing schemes, like MGNREGS, RTE, NRHM, NUHM, SSA and MDMS, states should be free to amend the templates in any way they deem fit.

Case Studies:A. In Bangladesh, regulations allow firms to retrench workers after giving one month’s notice.

This has been instrumental in making Bangladesh a hub for garment manufacturing as firms are more agile to changes in global demand.

B. In Germany and Japan, strength of representation organizations such as employee unions, employer associations, civil society organizations and the processes of consultation amongst them explain the enduring competitive strengths their manufacturing eco-systems.





5. Reform employment exchanges: outsource to private sectorStrengths and Opportunities:

A. There is a big problem of matching labour supply to labour demand, something that employment exchanges were supposed to do.

B. Barring limited instances of job offers at factory gates, there are only two channels of finding formal sector jobs: informal (family, caste, community) networks and labour contractors. This kind of information dissemination cannot be efficient, apart from commissions, exploitative or otherwise, paid to agents.

C. There can be no question of skill formation if recruitment is through such informal channels.

Weaknesses and Threats:A. Most existing employment exchanges are moribund.

How to get it done:A. Some states have experimented with reforming employment exchanges. States like Gujarat

and Rajasthan have allowed private placement agencies to get into the matching function. Even a state like West Bengal has permitted private training organizations to offer training at employment exchanges. The “job” or rojgarmelas in Rajasthan have been far more successful in offering placements than employment exchanges.

B. There can be skills deficits that are structural in nature. These require candidates to go through longer-duration training. In other instances, shorter-duration interventions will work. And in the last category, all that is required is last-mile un-employability. The shorter-duration and last-mile work more efficiently if there are clearing houses that match supply and demand. Therefore, privatize employment exchanges.

Case Study:A. Australia in the mid-1990s contracted out most of its public service-provided employment

assistance to private and non-governmental agencies on a competitive tender basis (the Job Network). The public employment service was thus abolished. This placed Australia amongst world leaders in the outsourcing of such services.

6. Amend Land Acquisition Act: Eliminate need for multiple clearances; keep price principle intact

Strengths and Opportunities:A. Easy acquisition of land has become the most formidable obstacle to setting up manufacturing

facilities.B. The new Land Acquisition Bill has created a new licence raj with clearances required at

multiple levels.

Weaknesses and Threats: A. The new law was recently enacted; it will be difficult to amend quickly.

How to get it done:A. Keep the price-provisions i.e. the requirement to pay 4 times the market rate intact. Amend

only the clearances provisions which will lead to delays.B. Impose stiff penalties if anyone is found violating the price principle.




Case Study:A. A. In 2013, Pune-based Bharat Forge Ltd led by Baba Kalyani proposed to convert its

Chakan special economic zone (SEZ) into an integrated industrial area and become the first company to take advantage of the Maharashtra government’s new industrial policy, which allows developers to exit projects to build Chinese-style industrial enclaves. Earlier in 2009, the company and the state government’s industrial infrastructure arm, Maharashtra Industrial Development Corporation (MIDC), had formed a joint venture to set up the SEZ and acquired 1,700ha of land.

7. The cost of power and energy for industry should be no more than for any other sector: end cross subsidy of rest of economy

by industryStrengths and Opportunities:

A. India charges higher tariffs for power supplied to industrial units than for regular consumers and agriculture. This can be equalized.

B. Low costs are the key for competitive manufacturing. India’s poor (and sometimes expensive) infrastructure ends up penalising manufacturers.

Weaknesses and Threats: A. It may necessitate a rise in tariffs for regular consumers and agriculture; will be resisted.B. It will be said that subsidy is being given for private profit.

How to get it done:A. Declare manufacturing a national priority, necessary to generate jobs.B. End free power to agriculture which benefits only the largest farmers; that will give room

for tariff cuts to industry.

Case Study:A. In China, provincial governments provide free land, low cost power (50% lower than in

India) & integrated infrastructure to major Chinese players to ensure low cost production and supply chain efficiencies.

8. End protection, and preferential treatment to manufacturing PSUs

Strengths and Opportunities:A. Inefficient PSUs drive down the competitiveness of the sectors in which they operate.B. PSUs have little commitment to quality control, so crucial for globally competitive

manufacturing.

Weaknesses and Threats:A. There will be vested interests in PSUs who will resist.

How to get it done:A. Grant full managerial autonomy to manufacturing PSUs; ask them to compete with private

sector on a level-playing field.B. Hire managers from the private sector to run PSUs.

Case Study:A. HAL is a classic example of a protected PSU which is inefficient. Defence manufacturing





(aircraft in particular) should be opened to the private sector.

9.Support firms that are innovators; strengthen IPR regime, give tax breaks for R&D

Strengths and Opportunities:A. Presence of strong manufacturing states such as Gujarat, Maharashtra, Karnataka, which

are adopting innovation driven strategy.B. Proposed creation of National Manufacturing Investment Zones (NIMZs) has received

special attention as it seeks to integrate the industrial infrastructure under one roof and achieve economy of scale in manufacturing sector to help it grow rapidly.

Weaknesses and Threats:A. As per the Global Innovation Index, India is ranked 56th with a score of 3.10. Iceland and

Sweden head the pack with scores of 4.86 and 4.85 respectively.B. India’s share of global manufacturing GDP has not increased over the past few years. Also

Indian manufacturing has low share in country’s GDP; quite lower than its peers.C. Innovation leads to automation leading to a cut in jobs. This would add to the already high

proportion of unemployed and underemployed work force.

How to get it done:A. Induce investment in R&D via the route of Tax Holidays, incentives such as Technology

IPRs, Quality Certifications etc.B. Source technical know-how from manufacturing firms abroad to facilitate extensive

utilization of IT for supply chain management.

Case Studies:A. A In Japan and Korea, private firms, government science and technology agencies and

technology institutes come together to produce large scale product and process innovations.B. B. Japan, Korea, Taiwan, China and Thailand have built up large and competitive

manufacturing sectors by processes of building capabilities and adopting strategies that induce such growth.

10. Fast track the commissioning of National Investment and Manufacturing Zones (NIMZs) and MSME Clusters

Strengths and Opportunities:A. The concentration of largely homogenous enterprises within a relatively limited

geographical area facilitates the intervention because of their similarity of needs and support requirements, speeds up the dissemination of best practices because of the pervasiveness of demonstration effects, and allows for a distribution of the fixed costs of interventions among a large number of beneficiaries. This is true for under-achieving clusters as well as for the best performing ones.

B. Bundling via integration of industrial infrastructure would help achieve economy of scale in the sector.

Weaknesses and Threats:A. Clusters are more often than not characterized by extremely fragmented knowledge, latent

conflicts, and an absence of a discussion forum.




B. SMEs in developing countries do not usually have on-going relationships and are not accustomed to presenting articulated calls for actions to the local policy makers.

How to get it done:A. Increase focus on developing special clusters for MSMEs for efficient resource utilization

and collaboration.B. Establish partnerships with private sector where specialized know-how is needed.

Case Studies:A. The Karnataka government has initiated the development of National Investment and

Manufacturing Zone at Tumkur near Bangalore. The Central government approved the setting up of NIMZ for which the state government has already 9,000 acres.

B. Delhi-Gurgaon-Faridabad–A cluster led by global OEMs (original equipment manufacturer) like Suzuki & Honda’s entry led to growth of components.

C. The government has already identified key clusters under Delhi-Mumbai Industrial Corridor (DMIC) project as an NMIZ.





TAXATION




1. For individuals, income tax bands and rates should be reset; with (a) no tax on incomes below Rs 3 lakh per annum for

income earners under the age of 65 and Rs 5 lakh per annum for pensioners, (b) 15% on the next Rs 3 lakh (c) 20% on the next

Rs 6 lakh and (d) 25% on income above Rs 12 lakh Strengths and Opportunities:

A. It will be a popular move and provide relief to honest taxpayers.B. It will promote compliance as tax rates fall across the board; likely to boost revenue.

Weaknesses and Threats:A. Reducing the top tax rate from 30 percent to 25 percent may be seen as a pro-rich move.

How to get it done:A. Make the announcement in the first Budget in July 2014. Change from current rates of (a)

no tax on income up to Rs 2 lakh (b) 10% on Rs 2-5 lakh (c) 20% on Rs 5-10 lakh and (d) 30 % on incomes above Rs 10 lakh.

B. Announce an end to all deductions and exemptions.C. Announce a commitment to retain the rates for five years, except for inflation-based changes

in threshold.Case Studies:

A. Singapore has a progressive tax structure. After deducting personal relief, personal income tax rates are between 0-20 percent.

B. Majority of households in the United States that don't pay federal income taxes are either elderly or paying payroll taxes. Approximately, 22 percent of non-payers are retirees.

C. In Switzerland, while higher marginal rates can start at lower income levels, the top effective federal rate of 11.5 percent starts at approximately 751,400 CHF for single tax payers. This though doesn’t include cantonal, communal or church taxes which can differ significantly.

2. Set a Corporate Profit Tax rate of 15% on profits of up to Rs 50 crore per annum and 25% on all sums above that amount.

End all exemptions, except for exports.Strengths and Opportunities:

A. It will end the complexity in corporate tax which is mired with high rates and too many exemptions.

B. Lower rates will encourage greater compliance.C. It will boost government revenue; at the moment too many firms pay MAT (Minimum

Alternate Tax) at a rate (18.5 %) lower than the 25 percent being suggested.D. Abolish MAT

Weaknesses and Threats:A. It will be opposed by vested interests in the corporate sector who benefit from the existing

system.B. Some populist politicians will argue reducing the top rate for corporate tax, is a pro-business

move.





How to get it done:A. Make the announcement in the first Budget in July 2014.B. Announce a commitment to retain rates for five years.C. Mobilise public opinion by pointing out the perverse reality of present structure where

corporates effectively pay low rates.

Case Studies: A. Bahamas doesn’t levy any corporate income tax; nevertheless companies are subject to

other forms of taxation. Multinationals pay an effective tax rate of between 5% and 15% depending on market cap.

B. Malaysia taxes corporate tax at 25%. In the European Union, the lowest corporate tax rates were to be found in Bulgaria (10 %) Ireland (12.5%) Latvia and Lithuania (15%) and Romania (16 %).

3. To reinforce the need for all companies to derive a much greater amount of export income than they do now, a tax rebate of 5% should be provided on profits derived from export income

in addition to rebates on indirect taxes. Strengths and Opportunities:

A. It will incentivize Indian firms to compete in global markets and improve their competitiveness.

B. That will have spillover effects for the local market which will get better quality goods and services at lower prices.

C. It will help bridge the current account deficit and pave the way for a surplus.

Weaknesses and Threats:A. It is an exemption, which is usually unadvisable for a solid tax system.B. It can be misused by firms through accounting tricks.

How to get it done:A. A. Announce it in the first Budget with other tax reforms.B. B. Rebate should be kept in place for at least 20 years (and not be subject to change by

successive governments) so as to bring about a long overdue structural change from chronic deficit to a significant (3% of GDP) structural surplus in the current account by 2025 and maintain either balance or a small surplus in the current account thereafter.

Case Studies:A. Exported goods are GST-free if they are exported from Australia either before, or within,

60 days of the first of the following two events: a) the supplier receives any payment for the goods; b) the supplier issues an invoice for the goods.

B. According to the World Bank estimates, Indonesia’s taxes on exports (% of tax revenue) was measured at 3.30 in 2011.




4. Amend Tax law to prevent future FMs from levying any surcharges/special levies on income or profits taxes for special purposes or to meet exigencies in revenue shortfalls. If exigent

revenue needs have to be met that should be achieved by adjustments of rates on indirect taxes (like Road taxes, Luxury

goods taxes, GST when it’s implemented).Strengths and Opportunities:

A. Surcharges and special levies are out of line with sound principles of taxation.B. It will force the government to budget its expenses more carefully. C. Indirect taxes are not progressive, so the government will be forced to think hard before

increasing the rates to meet revenue shortfalls.

Weaknesses and Threats:A. There will be criticism that government’s fiscal freedom is being curbed by law.B. There will be a resistance to provision to raise indirect tax rates to meet shortfalls as indirect

taxes are not progressive.

How to get it done:A. Amend the tax law in the first Budget.B. Tie this measure with a new FRBM which will force fiscal responsibility in any case.

Reduce revenue deficit and fiscal deficit by 0.5 percent of GDP every year.Case Studies:

A. Alaska in the United States doesn't have a state sales tax and depends chiefly on petroleum revenue to pay for its state operations.

B. There is no income tax or social security levied on earnings by the Qatar government.

5. Introduce GST with no exemptions; set a low rate of 12 percent (Centre plus states)

Strengths and Opportunities:A. It will rationalize the complex and cascading nature of the indirect taxes system.B. It will force greater compliance.C. Government as a whole will gain more revenue. D. It is estimated that it could boost the GDP growth rate by at least one percentage point per

annum.

Weaknesses and Threats:A. It will be opposed by some state governments because of perceived loss in revenues.B. It is viewed by some as stamping out fiscal autonomy of states.

How to get it done:A. Announce a grand bargain with state governments; assure not just full central compensation

for any losses but an addition to current revenues.B. Crucial for government not to succumb to temptation of a higher rate (say 16 percent) as

that will encourage evasion and lower revenue collections.Case Studies:

A. New Zealand's broad-based GST has often been suggested as a desirable model for a value





added tax.B. France was among the first countries to enact a common goods and services tax. Over 140


6. Tax agricultural income at the same rates/slabs as income taxStrengths and Opportunities:

A. There is no rationale to give rich farmers tax exemption.B. It will prevent people from avoiding taxes by falsely declaring their income as agricultural

income.

Weaknesses and Threats:A. Populist politician will term it an anti-farmer measure.

How to get it done:A. Bring agricultural income into the tax net in the First Budget in July 2014.B. Stress the point that a majority of farmers and agricultural labourers will still remain outside

the direct tax net because their incomes are too low.Case Study:

A. In Uruguay, the December 2006 tax reform (Law 18,083), implemented in July 2007, replaced three taxes levied on corporate income with a unified corporate income tax (impuesto a la renta de la actividadempresarial--IRAE), levied at 25%. The IRAE replaced the industrial and commercial activity tax (IRIC), the agricultural activity tax (IRA), levied at 30%, and the tax on commissions (IC).

7. Pledge that there will never be any retrospective change in tax laws

Strengths and Opportunities:A. Nothing leads to more uncertainty for investors than retrospective amendments in law.B. India’s reputation is badly damaged by the Vodafone tax amendment. It needs to be rectified.

Weaknesses and Threats:A. Some may argue that it is a government’s sovereign right to enact retrospective amendments

in law.B. Populist politicians may want to use it as an instrument to target some companies.

How to get it done:A. Prime Minister and Finance Minister must issue the pledge.B. If possible, enact it as a law.

Case Study:A. The government should address the Vodafone, Shell and Nokia disputes on a fast track

basis, within 3 months of taking office.




8. Reform tax administration: Allow tax scrutiny only with the permission of Revenue Secretary; Use modern technology to

reduce interface between tax official and citizenStrengths and Opportunities:

A. There is a need to reduce the harassment power of tax officials.B. Introduction of efficient information and online payment system will help to improve the

tax compliance.C. Well organized information systems can be used to professionally mine the data to identify

high risk tax avoiders.

Weaknesses and Threats:A. Tax bureaucracy will argue that it will encourage tax evasion and hamper their functioning.

How to get it done:A. All phone tapping by any police and intelligence agencies needs to be sanctioned by the

Home Secretary. Tax scrutiny should be put on the same track. Revenue Secretary should be the one point authority.

B. E-Governance systems can easily be introduced to allow online payments.

Case Studies:A. Implementation of an e-government policy in Mexico has positioned the country among

the top performers of online services in the world. B. Norway’s initiative to become a leader in the use of ICT in government has been sustained

by a high level of internet penetration and burgeoning information society.

9. Reduce arrears and settle disputes through fast track courts or through out-of-court settlement.

Strengths and Opportunities:A. In respect of only income taxes, the tax arrears in India amount to almost Rs. 5 lakh crore.

Reducing these arrears can help to boost revenue. B. An overwhelming proportion of the arrears are on account of disputes and a large proportion

is stuck in courts awaiting judgments.C. A large portion of revenue stuck in the apex courts after the tribunal gave the verdict and in

a significant number of cases, government is the appellant.

Weaknesses and Threats:A. It is difficult to recover almost 97% of the arrears in income tax for various reasons. The

amount stuck due to reasons like litigation, companies in liquidation, sick companies and untraceable taxpayers, amounts to Rs. 4.82 lakh crore.

How to get it done:A. Set up designated fast-track courts for tax cases.B. Use arbitration and out-of-court settlements as a rule rather than exception.

Case Study:A. The government in 2013 decided to set up six new benches of the Customs, Excise and

Service Tax Appellate Tribunal (CESTAT) to expedite disposal of indirect tax cases.





10. Devolve some powers of taxation to local city GovernmentsStrengths and Opportunities:

A. Many challenges of implementation in governance reside at the local level, particularly in cities.

B. If cities were allowed to raise their own finances, there would be greater accountability in use.

Weaknesses and Threats:A. Centre is loath to give up any powers of taxation: it is the source of its power over states

and local governments.

How to get it done:A. Allow 50 percent of stamp duties and road taxes raised in a city to be retained by the local

government.B. Allow some proportion of professional service taxes raised in a city to be retained by the

local government C. Tie it in with the grand bargain on GST. Offer greater autonomy in taxation to local

bodies within state.

Case Study: A. In a few transitional countries, including China and Vietnam, local governments have

traditionally had a larger role in administering national tax bases.




TWIN DEFICITS (FISCAL DEFICIT AND CURRENT ACCOUNT DEFICIT)





1. Announce a cap on subsidies at 0.75 percent of GDP; Lay out a roadmap to achieve it in three years

Strengths and Opportunities:A. It is the only sustainable way to reduce the fiscal deficit.B. The middle class and rich do not need subsidies on food and fuel.C. It will force a better targeting of the subsidies that remain.

Weaknesses and Threats:A. It will be opposed by populist politicians across the spectrum.B. It will be opposed by special interest groups, like fertilizer subsidies.

How to get it done:A. Make the announcement in the first budget in July 2014. That is when the political capital

of the government is highest.B. Amend Food Security Bill to target only those below the poverty line.C. Deregulate the price of diesel immediately. Increase prices by Rs 1-2 per month, instead of

50 paise.D. In a 24 month period, introduce direct cash transfers on a war footing, using the Aadhar

platform, to those below the poverty line who require food and fuel subsidies.Case Studies:

A. In New Zealand, despite initial protests, farm subsidies were repealed in 1984. Almost 30 different production subsidies and export incentives have been ended.

B. In September 2009, G20 leaders committed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption” at their summit in Pittsburgh, United States. This move was closely mirrored by Asia-Pacific Economic Cooperation (APEC) leaders in November 2009.

C. In June 2014, Indonesia increased petrol prices by 44% to cut its annual subsidy bill of $20 billion. Malaysia too followed suit and slashed petrol subsidies in the hope of filling a budget hole which had reached 4.5% of GDP.

2. Reduce the number of Centrally-Sponsored Schemes from 147 to 20. Each central ministry like HRD, Health, Urban

Development, Rural Development should be permitted just one programme; For instance, Rural Development should be

allowed a consolidated NREGA onlyStrengths and Opportunities:

A. There are 147 centrally-sponsored schemes (on education, health, roads, urbanization etc) many of which overlap. These can easily be reduced by 2-3rds to less than 50 immediately.

B. It will save a lot of resources in a sustainable way.

Weaknesses and Threats:A. Centrally-sponsored schemes are perceived to deliver political capital to the ruling party/

coalition at the centre.B. It is a way for the centre to control the spending patterns of the states.

How to get it done:A. Implement the recommendations of the Chaturvedi Committee report on rationalizing




centrally-sponsored schemes.B. Solicit the support of state governments for this, by offering them more freedom to spend

central resources (including on NREGA), in ways they deem appropriate.C. Over five years, reduce central schemes to less than 20.

Case Studies: A. In agriculture, there are a total of 13 schemes. Similarly, in Animal Husbandry & Dairying

there are 15 schemes. It is possible to merge many of them into a comprehensive scheme for development of sub-sectors.

B. Federations like Australia and Canada make provisions in their constitutions for equalizing levels of service by providing for transfer of resources from central government to state governments. In India, the Finance Commission transfers the funds. Though articles 275–280 of the constitution make similar provisions, these are meant to transfer resources to the states to meet their requirements of expenditure. There is no specific mention in our constitution.

3. Ask the Seventh Pay Commission to downsize significantly the lower bureaucracy at Class III and Class IV levels before

recommending a raise in wages for the restStrengths and Opportunities:

A. The Pay Commission is a once-in-a-decade opportunity to bargain with the bureaucracy on fundamental reform and downsizing.

B. That it will begin its work just 3 months before the next government is sworn in to office is an opportunity to influence its final output.

C. The fiscal cannot afford to pay a bloated bureaucracy higher wages.

Weaknesses and Threats:A. Previous Pay Commissions have failed to make an impact on productivity improvements

and simply ended up raising wages.B. Bureaucracy will protect its turf.

How to get it done:A. Strike a grand bargain with the upper bureaucracy; offer them higher salaries on the

condition that they massively downsize the lower bureaucracy at Class III and Class IV levels which is bloated and low in productivity. Offer a generous VRS.

B. Do not implement the recommendations on higher wages without full implementation of suggestions on productivity reform.

Case Studies:A. Professional recruitment and performance-based promotion systems have been introduced

in many countries like Brazil, Philippines, Thailand and Malaysia (not to mention Canada, Australia and UK).

B. Singapore’s civil servants are regarded one of most the efficient compared to those in other countries in Asia. Corruption is rare and cronyism is not a widespread problem. When it comes to capturing the potential of online government, Singapore is also ahead of the game.





4. Widen direct taxes base: Lower rates, end exemptions and tax agricultural income

Strengths and Opportunities:A. Only a small minority of India’s population pays income tax.B. Most corporates avail of exemptions to pay a lower rate. C. Rich farmers should not be exempt from tax: only income level and not profession should

determine tax burden.

Weaknesses and Threats:A. Special interests which derailed the Direct Taxes Code and had similar aims, will try and

stall direct tax reform.B. Taxing agricultural income can be a political hot potato.

How to get it done:A. Go back to the drawing board on the Direct Taxes Code.B. End all corporate tax exemptions. Set a flat, low rate of between 20-25 percent.C. Bring agriculture into the tax net. Make the case that a majority of farmers and agricultural

labourers will still be out of the tax net because their incomes will be lower than the threshold.

Case Studies:A. Picketty and Quian ("Income Inequality and Progressive Income Taxation in China and

India." CEPR Discussion Paper No. 5703. London, UK: Centre for Economic and Policy Research, 2006. ) estimate that rising inequality in China could generate more revenue from the current progressive income tax code equal to 4.0% in 2010, as compared to 1.0% in 2000, and 0.1% in 1990.

B. Low Taxes and stable money are best exemplified by Hong Kong and Singapore. Both have modest tax rates. Prudent macroeconomic policy within a stable political and legal environment has been the key to Singapore’s continuing success in maintaining one of the world’s highest levels of economic freedom.

C. In Uruguay, the December 2006 tax reform (Law 18,083), implemented in July 2007, replaced three taxes levied on corporate income with a unified corporate income tax (impuesto a la renta de la actividadempresarial--IRAE), levied at 25%. The IRAE replaced the industrial and commercial activity tax (IRIC), the agricultural activity tax (IRA), levied at 30%, and the tax on commissions (IC).

5. Reform Indirect Taxes: Introduce Goods and Services Tax at the rate of 12 percent

Strengths and Opportunities:A. Current indirect tax structure is cascading, complex and encourages evasion.B. A single, lower rate of indirect tax will encourage compliance.

Weaknesses and Threats:A. Resistance from state governments who fear revenue loss.

How to get it done:A. Offer the states a grand bargain. Guarantee no revenue loss. In fact, offer an additional

revenue gain.B. Important to keep the rate low (at 12 percent) rather than succumb to the temptation of




setting it higher (say at 16 percent). Revenues may not go up at a higher rate.

Case Studies: A. New Zealand's broad-based GST has often been suggested as a desirable model for a value

added tax.B. France was among the first countries to enact a common goods and services tax. Over 140


6. Launch an aggressive privatization (not simply disinvestment) programme

Strengths and Opportunities:A. Government should not be running loss making enterprises like Air India.B. A full-fledged privatization programme can help earn significant revenues which can be

used to retire debt – interest payments on debt are a major part of the fiscal deficit.

Weaknesses and Threats:A. Populist politicians and labour unions will strongly oppose.B. It will be argued that market conditions are not suitable to get an optimal price for PSUs.

How to get it done:A. Win over labour unions with generous VRS schemes.B. The new government should use its goodwill period – when markets are doing well – to

kick-start the process.

Case Studies:A. Well known examples of privatization includes the sale of firms like British Telecom,

British Gas, Japan Air Lines, Chilean state owned airline, Mexican telephone company.B. In the Nordic countries, sales of telecom company stakes dominated the privatisation

activities of 2000. The USD 7 billion initial public offering of shares in Telia, the Swedish telecommunication company, was the largest ever in the Nordic region.

C. Germany's privatisation activity included sales such as a third offering of Deutsche Telekom (DT) shares and the floatation of Deutsche Post, as well as the trade sale of Deutsche Bahn Housing.

D. Brazil, in 2000, made public offerings of 16% of the shares in Petrobras (oil) dominated Brazilian equity offerings and raised USD 4 billion. This was the largest-ever equity offering in the country.

E. China's Unicorn (telecoms) went through an IPO of a 20% stake, which raised nearly USD 5 billion, and was seen as a major boost to China's privatisation programme.

7. End intervention in currency markets; Let rupee find its own level

Strengths and Opportunities:A. Currency market offers an automatic adjustment to a large current account deficit.B. India does not have sufficient reserves to battle the might of global currency markets;

therefore a defence can go horribly wrong.






A. Sharp movements in the rupee (volatility) can be of legitimate concern.B. Public outcry over sudden decline in rupee’s value forces intervention.

How to get it done:A. Announce a free float of the rupee.B. Announce that the government will not intervene in currency markets through the RBI.C. Make the case that intervention in currency markets has a limited impact in any case; if

anything, markets easily break down the defence of central bank intervention quickly.

Case Studies: A. Chile, Colombia, Mexico and Peru are some of the countries which have operated with

free-floating currency exchange rates.B. Major industrialized countries such as the Canada and the UK, smaller OECD countries such

as Australia and New Zealand, and middle income countries such as Peru and Mexico, have all practiced floating with varying degrees of “dirt.” Even the US, usually regarded as the cleanest of the floaters, has intervened occasionally in the foreign exchange market.

8. Remove all barriers to foreign inflows, both FDI and FIIStrengths and Opportunities:

A. India is likely to have a current account deficit in the near term, which needs to be financed.B. While it is vulnerable, India is not in a position to pick and choose which inflows it would

prefer, either by sector or FDI vs. FII.

Weaknesses and Threats:A. Protectionist interests will insist on retaining caps on FDI in various sectors.B. Arguments will be made on the need to closely regulate FII to stem the flow of money from

dodgy sources and even tax havens.

How to get it done:A. Remove all FDI caps except in select strategic sectors like defence where it can be capped

at 74 percent.B. Defer General Anti-Avoidance Rules (GAAR), which empowers the (usually inefficient

and prone-to-harassment) tax bureaucracy to examine FII in detail, until the fundamentals which result in a big current account deficit are corrected.

Case Studies: A. Four of the top five recipients of foreign funds have been listed as developing economies

by the United Nations. They are China, Hong Kong, Brazil and the British Virgin Islands. B. New sectors of China’s economy are opening up for overseas investors and companies.

Deere & Company (NYSE:DE), the world’s largest agricultural machinery manufacturer, is investing in China.




9. Diversify trade: look for Free Trade Areas with non-traditional and traditional partners

Strengths and Opportunities:A. Boosting exports significantly is a sustainable way to move from a current account deficit

to current account surplus.B. India’s traditional markets for exports, the advanced economies, are likely to remain in

slowdown in the near future. Alternate markets need to be exploited.C. In traditional markets, non-tariff barriers prevent exports of certain goods, particularly

agricultural commodities.

Weaknesses and Threats:A. Negotiations over free trade areas are complex and long drawn.B. There is a risk that imports may rise faster than exports because of structural rigidities in

the Indian system.

How to get it done:A. Explore bilateral and multilateral FTAs with other emerging economies which are the

fastest growing markets in the world.B. Conclude the FTA with the European Union. It is the largest single market in the world,

which is almost entirely closed to Indian agriculture (preferences go to African economies and other Least Developed countries). A clause on greater labour mobility would boost Indian services industries.

C. Fast track an investment and trade agreement with the US (which includes greater labour mobility) which would help sectors as diverse as agriculture and IT to penetrate the US market more efficiently.

Case Studies:A. NAFTA has been a remarkable success story for all three partners. It has contributed to

significant increases in trade and investment flows between Canada, the United States, and Mexico. It has benefited companies in all three countries, paving the way for increased sales, new partnerships, and new opportunities.

B. One of the most important RTAs in Asia and the Pacific is the Association of South-East Asian Nations (ASEAN) Free Trade Area, also referred to as AFTA, which aimed at eliminating tariff barriers among member countries through the Agreement on the Common Effective Preferential Tariff (CEPT) scheme.

10. Address non-tariff barriers (in sectors like pharmaceuticals, media, agricultural commodities) which cause huge trade

deficit with ChinaStrengths and Opportunities:

A. Anywhere between 30 percent and 50 percent of India’s current account deficit is because of its huge imbalance of trade with China.

B. While it makes little sense to restrict imports from China, India needs to forcefully bargain for a reduction in non-tariff barriers for sectors like media, pharmaceuticals and agriculture (meat, fruits and vegetables) where India has a comparative advantage.





Weaknesses and Threats:A. India must avoid a trade war, or a tit-for-tat policy with China. B. In some sectors like agriculture, structural problems may prevent India from taking

advantage of a lowering of non-tariff barriers.

How to get it done:A. Make it a top priority in the bilateral agenda with China.

Case Studies:A. EU-Korea FTA is one such example of the EU's strategy for reducing non-tariff barriers

for trade liberalization.B. Prime Minister Manmohan Singh spelled out the government's commitment to remove all

tariff and non-tariff barriers on Bangladeshi exports in 2011.









1. Launch an improved National Urban Renewal Mission scheme. The objective should be to double or nearly double investment in urban infrastructure from 0.7 percent of GDP

currently to 1.1-1.4 percent of GDP in five to seven yearsStrengths and Opportunities:

A. Improved infrastructure will make our cities more productive and wealth-creating.B. Cities economise on space and are a magnet for talent and youth. A young country needs

many more cities to draw its youth for education and employment.C. Industrial and services clusters and satellite cities will provide new engines for growth.

Urbanisation is the only way to take GDP growth to the 8-10 percent range quickly.

Weaknesses and Threats:A. Fast urbanisation brings with it greater possibilities of crime, pollution and stressful

lifestyles. It will call for more effective policing and other soft interventions.B. Cities tend to be where rural politicians and business interests seek to generate electoral

funds by use of discretionary controls (on land, etc) and regulations. This group will try to thwart radical change in city governance structures.

How to get it done:A. The Committee on Urban Infrastructure calls for the creation of a unified Ministry of Urban

Affairs and Housing with its counterpart in states. B. If funds are directly provided by the centre to the top 50 cities, states will not stand in the

way.C. Centre must use political allies in cities to canvas for changes in city governance structures

in order to receive funding.

Case Studies:A. Delhi and Ahmedabad are two urban centres that have benefitted from massive investments

in infrastructure

2. Increase floor space index (FSI) in cities; at a minimum double existing limits

Strengths and Opportunities:A. One of the big myths about urban areas is there is too little land and it is pricey. This is true,

to some extent, but more urban land can be made available by increasing FSI (Floor Scale Index). A doubling of FSI doubles land availability, reducing the effective cost of land.

B. Allowing higher FSIs allows a city to tax buyers more to raise funds for the infrastructure necessary for allowing high-rises.

Weaknesses and Threats:A. Politicians and builders have built a covert regulatory lock on making further land available

for development. This is to protect their profits on existing land and benami property parcels. They will resist big increases in land availability tooth and nail.

B. Increase in land availability will bring down property values – which even banks who have lent money to property will resist.

How to get it done:A. The best way to ensure reforms in urban regulations is to tie all central funding to these

reforms. Funds under JNNURM can be linked directly to how FSI and urban development laws are changed to ensure cheaper land for housing and transport.




B. Another option is to create satellite cities with good public transport connections – with transport facilities preceding development.

Case Study:A. FSIs in Singapore, New York and Hong Kong are in the range of 5-15 against just 1.33-2

in Mumbai.

3. Permit charter cities which run to separate rules without state government interference

Strengths and Opportunities:A. Charter cities are cities with their own rules of governance, independent of the state laws.

They can exist only if state governments allow them. B. Modern cities need corporate-style governance structures with a CEO at the top. At the

very least, the top official or mayor will have to be directly elected and accountable to the residents in some way.

C. India needs charter cities because such cities tend to attract lots of talent and industry by giving them lots of freedom and encouragement to trade and create wealth.

D. A start can be made in the new cities to be built along the Delhi-Mumbai Industrial Corridor, even though states will have to take leadership on this score.

Weaknesses and Threats:A. Our cities are ruled from state capitals because of their wealth-creating potential. In

Mumbai, for example, more power rests with the unelected Municipal Commissioner than the elected mayor. Politicians will resist giving cities freedom to create their own rules and taxes because this will eat into their own sources of illegal wealth.

How to get it done:A. Progressive states can make a start with charter cities by appointing CEOs to run them and

also by making changes in municipal laws.B. In union territories, which are run directly by the Centre, efforts can be made to create

charter cities. Delhi would be a great experiment. So would Pondicherry or Silvassa.

Case Study: A. The city-state of Singapore is a great example of how a charter-city can create wealth and

growth for its people. But the idea can be reasonably well replicated in a large country.

4. Allow city agencies to raise their own financesStrengths and Opportunities:

A. Financial autonomy is crucial for a city government to implement programmes effectively.B. It will force accountability on city authorities who will no longer be able to pass the buck

on to state governments. Weaknesses and Threats:

A. With rapid urbanisation and cities being the main centre of economic activity, a higher allocation of resources to cities (even though correct and long overdue) could result in challenges in funding initiatives in non-urban areas, in the short to medium term.

B. It could lead to lop-sided economic development across the country leading to even higher migration from rural to urban area. Despite this hurdle, it will help to correct the current imbalance by diverting unproductive manpower away from and reduce dependency on agriculture.

How to get it done:A. The professional tax collected in the city should be earmarked for the city government.





B. 50% of the stamp duties collected on property transactions in city limits should be given to the city.

C. 50% of the road tax collected in the city limits should be given to the city.

Case Study: A. The new City of Toronto Act – which came into force on January l, 2007- introduced new

powers to provide tools and options to the new Toronto government to help achieve "made-for-Toronto" policies that support achieving prosperity, opportunity and liveability for all. The new Act was also part of the Ontario provincial government's overall municipal reform efforts, which recognised cities as strong economic engines.

5. Enforce public disclosure of all city government decisionsStrengths and Opportunities:

A. To most citizens, it is not clear what the civic agencies are doing, or how well they are doing it. It is important to set measures of success for each of the agencies, and to also have public disclosure of their work, whether in small projects or at the level of achieving an overall vision for the city.

Weaknesses and Threats:A. It will be resisted by the bureaucracy and politicians.

How to get it done:A. Public disclosure of expenditure on all projects.B. Public information on all tenders for works executed in the city.C. Regular progress reports on all projects.D. Performance audits of projects undertaken by the city corporation, with scope for citizen

feedback.E. CAG audit of the municipal body each year.F. A public accounts committee to be created to provide continuous improvement in standards

for project execution.

Case Studies:A. The Department for Communities and Local Government (DCLG) asks all local councils

and fire and rescue authorities in England to publish spending information over £500 online. B. The city of Perth in Australia follows Public Interest Disclosures Act 2003 which recognises

importance of contributions of staff to enhance administrative and management practices and strongly supports disclosures being made as to corrupt or other improper act.

6. Redevelop slums for low-cost housingStrengths and Opportunities:

A. All urban areas, and especially metros, have large slum pockets to house migrants of every kind. There is land available for vertical growth, but there is a problem about ownership and tenancy. However, most slums are on government or public sector land, and hence developing them is not going to create any legal tussles over ownership.

B. Since land is largely a state subject, states have to be involved in the planning. What the centre can do is draw up a draft scheme and offer interest-free seed funding for creating pilots projects – one in every state. The states can then replicate these in other areas.

C. Instead of letting vested interests squabble over land ownership, the best way to make it work is to retain the ownership of the land in government hands, and asking builders to develop housing for the poor on the basis of construction costs.

D. The cost of the construction of houses given to slum-dwellers and squatters can be recovered though reasonable rentals over 15 and 20 years.




E. To make the resultant property market vibrant, sale or lease of the house so provided can be done through a fixed transfer fee payable to the government, or the corporation assigned the job.

Weaknesses and Threats:A. Slum housing has a transitional problem of convincing squatters to move temporarily

somewhere else while buildings can be constructed. This can be tackled by first constructing where land is available, and then offering people in existing slums ownership of built houses. When they vacate, that land can be taken over for fresh construction.

B. There are many vested interests, including the underworld, involved in slum properties. States will have to be prepared to handle law and order problems in the interim.

How to get it done:A. The best way to get the slum development programme kickstarted is to get pilots

commissioned through a corporatised government entity run by competent bureaucrats. B. Once a pilot is showcased, demand for more such schemes will come from below. The key

is to show and sell.Case Studies:

A. Real estate developers in Surat have started the survey of as many as 80 slums of the 241 identified to be re-developed as a part of Surat Municipal Corporation's (SMC) plan to make Surat a "Zero Slum City.”

B. Redevelopment and slum rehabilitation sanctioned by the Maharashtra government have redefined the lives of an estimated 1.5 lakh families who have got or will get flats under the scheme in the city.

C. The Karnataka government has decided to implement the Rajiv Awas Yojana (RAY) in 10 city corporation limits to facilitate affordable housing for slum-dwellers.

7. Central and state public sector undertakings are some of the largest owners of land – Divest this land via auctions

Strengths and Opportunities:A. The Railways, for example, are said to own an estimated 4.3 lakh hectares of land, and at

least 10 percent of it is commercially exploitable immediately. B. Public sector units created in the 1950s, 1960s and 1970s have large tracts of land in places

that are now becoming urban (SAIL, for example). Defunct public sector units, like the fertiliser unit in Sindri, for example, have more than 6,000 acres of land that can be used either for setting up another industrial unit without land acquisition or to create new urban hubs.

Weaknesses and Threats:A. Getting public sector units across various ministries to pool their resources, especially when

ministries are run by different coalition partners, can be tough. But the scheme does not need 100 percent participation to succeed. Proof of concept can be established with even one public sector company ceding its land – and the others joining in later.

How to get it done:A. The best way to go about it is to create a public sector land corporation which will pool all

the land available in various parts of the country, and offer shares to the units ceding the land. As the land is developed and sold, it will create revenues in proportion to the land ceded to the public sector corporation.

B. The land corporation can be listed, so that PSUs seeking to cash out can sell on the market or hand it over to private equity players or other PSUs.

Case Studies: A. The Alaska Constitution, State laws, and the Alaska Legislature all direct the Department





of Natural Resources (DNR) to sell state land for settlement and private ownership. DNR makes land available through two types of programs. The first is a sealed-bid auction program for the sale of subdivision and other surveyed parcels. The second program is the Remote Recreational Cabin Sites which is similar to the previous remote parcel and homestead offerings.

B. The Government-owned National Textile Corporation (NTC) in 2010 had launched the country's biggest-ever land e-auction of Poddar Mill, its 2.4 acre mill in Worli Naka in Mumbai.

8. In peri-urban and peri-metropolitan areas, ELIMINATE the need for “prior approval” to convert Agricultural land to

Residential land. Strengths and Opportunities:

A. Cities have to expand both vertically and horizontally. Logically, they need to spread into rural pockets on the outskirts.

B. It will eliminate corruption and rent seeking associated with approvals.

Weaknesses and Threats:A. The Land Acquisition Act may need to be amended, which will run into political resistance.B. Farmers need to be given adequate compensation otherwise there will be fierce resistance.

How to get it done:A. Make the land-use change “automatic” on payment of a flat fee per acre.

Case Study: A. The Maharashtra Land Revenue Code 1996, u/s 44A has simplified the process, eliminating

the need for permission in case of use of agricultural land for bonafide industrial uses, subject to certain conditions, which include the land being identified for industrial purposes under any plan, approved or under preparation, under the MRTP Act, 1966. The simplification though does not extend to other uses like residential or commercial, even when the land has been identified for such purposes under approved plans prepared under MRTP Act, 1966.

9. Encourage affordable housing by eliminating stamp duty for small apartments (less than 600 sq feet) and by automating

registration to eliminate transactions costsStrengths and Opportunities:

A. Affordable housing is under-supplied.B. Measure will have popular support.

Weaknesses and Threats:A. Revenue authorities will resist exemption.B. Opens up lobbying for other exemptions.

How to get it done:A. Equalise circle rates with market rates of land. The revenue loss from this exemption will

be easily made up.




Case Study: A. The Australian Capital Territory (ACT) is proposing to phase out stamp duty gradually over

the next 20 years, substituting the lost revenue with an increase in general rates, effectively a land tax. The ACT model will address the potential shock of change, which is to phase the stamp duty reductions and rate augments so progressively as to avoid any sudden jolt to the property market.

10. Invest heavily in urban transport: every city with population over 1 million should have a metro

Strengths and Opportunities:A. Cities need to expand horizontally. Lack of connectivity is an obstacle.B. It will prevent congestion caused by private vehicles.C. It will have a positive effect on pollution mitigation and climate change policies.

Weaknesses and Threats:A. It is logistically difficult in over-crowded cities.B. Existing public transport authorities do not have the required competence.

How to get it done:A. All cities with a population above 1 million should have a metro system.B. Construct elevated expressways to connect centre with peripheries.C. Set up new metro construction companies and give out expressway contracts to private

companies.Case Study:

A. The Delhi Metro Rail Corporation is worthy of emulation.








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