It is turning out to be a cracker season for Indian economy, far louder and momentous than Diwali. Almost every sector be it manufacturing, the earlier bad boy, services; exports; even agriculture, with arrival of corporates in farming, has boom stories to tell so much so that whosoever has a product or a service to sell finds a market. For instance two –wheeler makers sold over 8 lakhs motorbikes with Hero Honda accounting for more than half in month of October. Nearly all listed companies on bourses delivered better than expected results for third straight year in row and have upped their future earning guidances. Dalal Street reported that BSE Sensex gained a whooping 1722+ points, touched the magic mark of 9,000 and Indian stock market outperformed many global indices by a margin. Tax collections both personal and corporates have exceeded their targets. That too in a country where black money was the norm not few seasons ago and financial prudence was gauged from tax saved or income hidden from authorities, courtesy draconian tax regime. The RBI expects the GDP growth to be 7%.Such is the force of good news that one could be blown off one's rational two feet and wonder if the central government actually matters. After all the ragtag coalition of 23 parties has made more news for wrong reasons than the right ones including high voltage Left outburst against economic reforms in any form. It is therefore very critical to remember that all drivers for progress are coming from external, reading global sources, like global growth story and placement of India-China in the growth map, huge liquidity overhang that makes borrowing affordable. Very simply, India on the strength of its huge population bank is on a spending spree. Easy availability of loans coupled with easy installment options and commendable salaries that make repayment possible are fuelling consumption index that in turn means growth opportunity for manufacturing industry and allied service providers.
All this has been possible through the first wave of reforms that initially exposed the ills of Indian economy but persistence with reforms by subsequent regimes has finally delivered. Unless there is next big wave of reforms the economy juggernaut cannot be sustained. And very commencement of the same seems doubtful despite Dr.Manmohan Singh, the earlier originator of reforms, occupying the prime ministerial chair given the fractured mandate and compulsions of electoral plus coalition politics. Also in the present buoyant picture –the Left brigade-could come up yet another populist freebie to spend hard earned monies for the upliftment of weaker sections of society, who can actually uplift when benefits of reform process are allowed to trickle down to them. And the freebies do harm the economy.The pro-reform bridge, however miniscule its strength may be in present, must seize the moment to push for- opening of retail, unlocking the potential of agriculture, divestment of public sector, pension and labour reforms, investment in infrastructure and good quality higher education especially in technology and research and most importantly fixing the tax-GDP ratio.Boom time optics might suggest government doesn't matter or aid in process but the reality is it can definitely mar the next Diwali. Unless it decides to act on reforms .Now.