And yes, the weak reform sub-text continues. In the current year, the revenue of 30 VAT implementing states and Union territories has registered a growth rate of over 26 per cent till the end of December, over the corresponding period of the previous year. Despite this, the states still cannot agree on phasing out the central sales tax, the next step forward.

The same round of posturing held up the introduction of FDI in insurance. Even now LIC continues to gain an increasing percentage of market share. In new premium, LIC’s market share is about 80 per cent this year, with the 15 private players, most of whom are joint ventures with multinationals, sharing the remaining 20 per cent. Insurance is now spreading out to rural India as companies access fresh segments. Yet when successive governments, including one with the current finance minister, P. Chidambaram, in 1997, tried to pass the FDI hike through Parliament, those arguing to save the domestic insurance sector were far less sanguine about LIC’s ability to hold up against foreign competition. And yes, despite the point having been proved, the weak reform plot continues till today, with the familiar opposition rearing up against pushing the FDI cap up to a more liberalised 49 per cent.

Also take the debate to permit telecom firms to switch to a revenue share model instead of licence fees. The switch happened in 1999 and anybody who goes through the figures on mobile telephone coverage would not hesitate to acknowledge the scale of changes that swept through the telecom landscape from that year. The ubiquitous mobile has changed the income potential of a large army of self-employed people. It is no more a rich man’s toy. The ‘no-changers’, of course, said that the move was a clear plot to cheat the government of revenue and make life difficult for MTNL. Yet BSNL came up in October 2000 and the rest is history. Sounds specious? Refer to developments on the SEZ tangle.

... contd.