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Return to trade liberalisation. Widen tax base to spend more. Initiate land and labour reforms. Read full article With fiscal year 2014-15 already underway and the interim budget in place, the room for major tax-expenditure adjustments in the first year is limited. Therefore, the new government's focus should be on modest tweaking of the budget, laying out the road map of future fiscal actions and making as much progress towards them as possible. On the tax front, the revised Budget must focus on completing the Goods and Services Tax (GST) reform by March 31, 2016, and begin action by clearing all central sales tax dues of the states and winning their confidence. The revised Budget should also commit the government to implementing a new Direct Taxes Code (DTC) beginning with the next fiscal year and spend the current year reworking the existing draft and developing consensus on it. The Budget must reassure investors that the government will not introduce measures such as retrospective taxation that would render investments that were profitable when undertaken turn unprofitable now. Symmetrically, it should warn…

Read full article Abstract: Arguably, parliamentary polls of 1977 and this year are two of the most important elections in Indian history. The former was a referendum on political freedom and the later on economic freedom. Ironically the Congress party, which laid the foundation of political freedom through a democratic Constitution in 1950 and of economic freedom through trade and investment liberalisation in 1991, ended up on the wrong side of the fence in both elections.

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A Narendra Modi administration would believe more in decentralisation than would a Rahul Gandhi administration Read full article Both the Congress and the Bharatiya Janata Party (BJP) manifestos are now out. They, along with the speeches by the leaders of the two parties, provide the basis for the comparison of likely administrations under them. There is agreement between the two sides on objectives: both would like to rapidly end poverty, illiteracy and ill health and modernise India. But the preferred policy instruments markedly differ. The BJP manifesto largely reflects the view articulated by Narendra Modi in his numerous speeches in the last two months. He argues that growth and social spending it makes possible are for all citizens and actively opposes discrimination based on religion citing the Constitution. Therefore, he is likely to rely first and foremost on growth and development to eradicate poverty, illiteracy and ill health. Mr Modi firmly believes in building highways, railways, cities and universities to modernise India and to create jobs that would empower people to access housing, education and health. In assessing schools for…

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