Blitz Bureau
NEW DELHI: The Prime Minister’s declaration that India has “boarded the Reforms Express” reflects a conviction that the reform debate is over and execution is now paramount. After decades of hesitation and half-measures, this sense of urgency has its merits. Yet speed, while politically energising, also raises legitimate questions about balance, sequencing and institutional capacity.
Reforms inevitably disrupt settled arrangements. When pursued at pace, they magnify both benefits and stresses. India’s own reform history is instructive. The 1991 reforms succeeded not only because they were bold, but because they were accompanied by macroeconomic stabilisation, political consensus and administrative recalibration.
Today’s reform push is unfolding in a more complex environment — marked by global fragmentation, weak external demand and persistent domestic inequality.
The Government’s emphasis on trust-based governance and deregulation is directionally sound. India’s control-heavy system has long penalised entrepreneurship, especially among small and medium enterprises.
Simplifying tax laws, cutting compliance burdens and rationalising labour regulations were overdue. However, execution remains uneven. For many businesses, the problem is not lack of reform intent but regulatory uncertainty — frequent rule changes, ambiguous interpretations and uneven enforcement across states.
The success of reform will hinge on whether gains are widely felt. Growth without visible job creation, income mobility and regional balance risks weakening the very political and social consensus that sustained reform momentum ultimately depends upon.
Tax reform captures this tension. A simpler GST structure and a modernised income tax law are desirable goals. Yet GST continues to suffer from delayed refunds, compliance complexity and Centre–state frictions. Without addressing these operational weaknesses, further restructuring risks deepening distrust rather than restoring confidence.
Labour reforms present a similar paradox. Consolidating multiple laws into four labour codes makes administrative sense, but implementation has stalled as states hesitate to notify rules, reflecting political and social sensitivities.
Faster reform may appeal to investors, but labour markets also require legitimacy and social buy-in. Without credible safeguards and consultation, reforms risk being perceived as one-sided — even if their long-term intent is inclusive growth.
The claim that this reform cycle is aspirational rather than crisis-driven is persuasive. India’s demographic window is real, but finite. Yet aspiration cannot substitute for institutional readiness.
District administrations, municipal bodies and state regulators, the frontline of reform delivery, often lack manpower, skills and digital capacity. Expecting rapid, high-quality outcomes without parallel administrative strengthening could blunt reform impact.
Bold moves such as opening nuclear energy to private participation signal ambition. But private capital demands regulatory clarity, credible dispute resolution and predictable policy horizons. Announcements must be matched by rulebooks that inspire confidence rather than caution.
Trade agreements, too, reflect realism in a fractured global economy. But liberalisation carries adjustment costs. Without parallel investments in logistics, skills and credit access, Indian firms may struggle to compete.
Above all, reform success will hinge on whether gains are widely felt. Growth without visible job creation, income mobility and regional balance risks weakening the very political and social consensus that sustained reform momentum ultimately depends upon.
Momentum matters. But if 2025 is to be a landmark year, it will be because reforms moved smart, strengthened institutions and carried public trust with them — not merely because they moved fast.