Bills in Winter Session key to policy pragmatism: experts

The government can send a strong signal of 'policy pragmatism' in its approach towards economic issues by taking forward various reform Bills in the Winter Session of the Parliament, experts have said.

Accordingly, the slew of economic reform Bills, lined up for the session beginning tomorrow, would also present the government with an opportunity to put to rest the prevailing notion about a 'policy paralysis' in certain sections.

However, some analysts and economists are of the opinion that most of the reforms could be 'populist' in nature and their impact on the financial markets could be minimal, as the growth-critical structural reforms may get further delayed.

The government has listed as many as 31 Bills, including Mining Bill, Food Security Bill, introduction of Goods and Services Tax (GST), FDI in multi-brand retailing, aviation and electricity distribution reforms.

Commenting on the repercussions of the decisions in the Winter Session of the Parliament on capital markets, SMC Global Securities' Strategist & Head of Research, Jagannadham Thunuguntla, said that all these reforms were critical and significant in nature, "but, big question is: will these Bills be passed in this session?".

However, even if some of these Bills get passed, it would send a strong signal that "policy pragmatism is arrived at, by overtaking policy paralysis", he said, but quickly added it might still not enthuse the markets much.

"These Bills may get popular headlines, but may not get FDI flows. However, these Bills will have significant impact over medium-term to long-term point of view," he noted.

Consultancy and research major Dun & Bradstreet's India Senior Economist Arun Singh said that "the government will be determined to pass the GST, which will be an important milestone in India's fiscal landscape and long overdue."

He, however, added that "further rounds of discussions" are likely to take place for the other reforms to be passed.

The analysts also believe that the winter session could be overshadowed by the developments related to the five states, including Uttar Pradesh where Assembly elections are due early next year.

"The government will largely pursue populist reforms over the next 6–8 months and will delay the tough reforms," global investment banking and equity research firm Macquarie said in a research note.