A 45-member Council of Ministers is now in place, with some gaps to fill for rearranged portfolios. Prime Minister Modi has set a 10-point programme for his Government and Ministers are to report on their first 100 days’ accomplishments. Mr Modi has also directed PMO on fast-track procedures and effective monitoring for people’s grievances and policy matters respectively as well as to treat issues raised by States with priority and sensitivity.

Mr Modi is keen to strengthen the Federal structure as well as impart greater economic content in foreign policy while seeking to provide a new face for his Government that functions smartly. His 10 points include addressing immediate economic concerns (inflation too?) and major reforms, such as in infrastructure and investment, and priorities for health, water, education, roads and energy. There is notable emphasis laid on reviving confidence in bureaucracy and for time-bound policy executions, transparency and innovation in government system.

A hectic week of activity at the highest level, notably the spectacular assembling of SAARC leaders has warmed the hearts of many not only in India but has also been commended abroad and the London Economist calls it a “Flying Start”, saying Mr Modi “appears to be in a hurry” to get India moving to stabilize a fragile economy and revive investments, growth and jobs. Along with it all this, the hope goes that with so much power he now commands, Mr Modi would not turn autocratic in its exercise.

The bilateral talks with South Asian leaders at the start of the new Government makes a promising start in reactivating SAARC leading to greater trade and economic cooperation and consensus building to tackle political issues and irritants. With a start in regional diplomacy, Mr Modi has been able to clarify India’s stand on key issues that figured in his talks with Pakistan Prime Minister Mr Nawaz Sharif and the Sri Lankan President Mr Rajapakse. These related to preventing terrorist attacks across the LOC and ensuring the promised degree of autonomy for the Tamil North.

China’s Prime Minister Mr. Li Keqiang has congratulated Prime Minister Modi on his victory and conveyed his government’s desire to establish robust partnership with the new government for further development of Sino-Indian relations. In the exchange through telephone, Mr Modi thanked Premier Li and underlined the priority of China in India’s foreign policy and said he would work to resolve any outstanding issues in bilateral relations while keeping the strategic perspective of their countries’ development goals and long-term cooperation.

But it was not altogether an unruffled week of harmony as a controversy erupted over a statement of one of the new Ministers of State Dr Jitendra Singh relating to the future of Article 370 – abrogation of which had long been on the BJP’s Hindutva agenda. It elicited a warning from the Jammu and Kashmir Chief Minister Mr Omar Abdullah maintaining that any attempt to tamper with Article 370 would lead to re-opening the State’s accession to India.

Equally quick was a riposte from RSS leader Mr Ram Madhav who said Mr Abdullah could not object to an open debate on the subject, as if Kashmir was his fiefdom, and that Jammu and Kashmir would remain integral part of India. The next day, Dr. Jitendra Singh (BJP) elected from Jammu, assumed office as Minister of State in the PMO. The BJP election manifesto had included construction of Ram Temple and a Uniform Civil Code, the other long-standing items of the party’s agenda.

At its first Cabinet meeting, the Modi Government decided to set up a special investigation team to unearth Black Money. The Prime Minister, having made known the priorities for the Government, Mr Jaitley is reportedly working on a path-breaking Budget for 2014-15 with all its formulations on fiscal, tax and other reform policies. It would be the major determinant of the directions of the new Government for scrutiny by all investors and global securities firms and credit rating agencies.

Already, the intention to do away with retrospective taxation on multinational firms has been welcomed. With the economy having begun to show some positive signs, especially on the external front, there has been some revival of capital inflows, apart from NRI deposits, but global investors would look for the fuller picture of public finance and the new Government’s fiscal and tax strategies, with particular reference to subsides and policy reforms.

An ebullient Finance Minister Mr. Arun Jaitley has no doubt sought to ignite a mood of optimism all-around and also has clear ideas on immediate pre-budget actions needed for the coming weeks to stabilize the economy and moderate inflation. He would follow up these with what is being conceived to be a landmark Budget of reform and restructuring of the economy he would present in July. Its major focus would undoubtedly be to reactivating the economy now performing below potential, revising investments, speeding up infrastructure projects and raise the level of economic activity and services for higher growth and jobs.

Since the new Lok Sabha is to meet from June 4 to 11 for swearing-of members, the Speaker’s election and importantly, the President’s Address on June 9 – which should outline the legislative agenda – the current policy vision and reform outlines that are being made public are apparently to send out immediate signals of government moves to re-create business and investor confidence.

Mr Jaitley has also indicated major changes in equity and debt markets would be put through over the next three months. The proposals are said to include liberalization of foreign borrowing norms and lifting of capital controls imposed by the Reserve Bank late last year. The Finance Ministry is also likely to replace short-term capital gains tax with a higher securities transaction tax (STT) which could be part of the Budget.

Besides direct tax and other reforms – though it is a moot question whether the GST could be operationalised by passing legislation in the budget session as the Finance Minister is to set up another Empowered Committee of State Finance Ministers – a large disinvestment/privatization programme can be an immediate option for the Modi Government, taking advantage of the current buoyant market conditions.

Although Mr Jaitley is also planning a visit abroad to carry a new message for the investors and governments, it would preferably be after the presentation of Budget, which would provide the larger framework of policies and the socio-economic development programmes that the Modi Government would spell out. Broadly, so far the accent is on re-focussing those policies and reforms the Congress-led UPA Government owned but failed to implement. (IPA Service)