The strategy of the Union Budget 2015 is to generate double-digit growth in the economy with Rs. 70,000 crore of public investments in railways and roads infrastructure, which will also, its makers hope, crowd in private investments.
It does not rely on new, ‘big bang’ reforms over and above those already being pursued – such as the goods and services tax and rationalisation of subsidies – as the BJP’s loss to the Aam Aadmi Party in the Delhi polls strengthened the anti-reforms voices within the party and the government. In the fine print, though, it mentions ‘strategic disinvestments’, including of SUUTI, Balco and Hindustan Zinc.
“Big bang reforms as conventionally understood are an unreasonable and infeasible standard for evaluating the government’s reform actions,” Chief Economic Adviser Arvind Subramanian wrote in the Economic Survey, the curtain raiser to the Union Budget. Making out a case for ‘incrementalism,’ Dr. Subramanian wrote: “Boldness in areas where policy levers can be more easily pulled by the Centre, combined with incrementalism in other areas, is a combination that can cumulate over time to big bang reforms.”
This strategy was conceptualised chiefly by Dr. Subramanian, in keeping with Prime Minister Narendra Modi’s ‘Gujarat Model’ of infrastructure-led economic growth.