Labour reforms in PM's six-month wishlist

Ministers told to overhaul tax regime, subsidies, FDI policy.

Prime Minister Manmohan Singh today set a six-month agenda for his ministers, including changes in the tax laws and structures, implementation of financial sector reforms, labour law changes, review of the foreign direct investment norms and phasing out of some subsidies.

On taxation, revision of the Customs and central excise codes, implementation of VAT and a plan to allow states to levy tax on services have been identified as Policy Thrust Areas for the finance ministry.

A statement from the Prime Minister's Office also called for implementation of a new scheme called "Bharat Nirman", for creation and upgradation of rural infrastructure.

The finance ministry has also been asked to prepare a white paper on disinvestment, initiate steps for better regulatory supervision and ensure better credit flow to the unorganised and rural sectors.

The action plan for the finance ministry assumes significance in the preparations for the Budget.

For simplification of expenditure, amendments to the General Financial Rules, as proposed by a task force, are to be implemented.

The task force had proposed a new system to bring about flexibility, delegation of powers and accountability, besides strengthening the systems for resource transfer from the centre to the states and the civil society.

Computerisation of the income tax set-up and electronic data interchange for foreign trade are the other items on the PM's agenda, which was finalised after consultation with the ministries and departments and are in line with the commitments under the National Common Minimum Programme.

Institutional reforms focusing on decentralisation, simplification, transparency, accountability and e-governance have been insisted upon for all ministries. The PMO also proposes to take the initial steps for administrative reforms in the next six months.

The National Policy on Subsidies will identify the target groups, goods and services and their subsidy norms and also formulate an exit strategy for existing subsidies that are inconsistent with the policy.

The rationalisation of fertiliser subsidies, revamp of public distribution system and improvement in the functioning of the Food Corporation of India have also been proposed.

For corporates, the prime minister has asked for the removal of multiple approvals and forms as recommended by the Govindrajan Committee. A new framework through the Competition Commission of India and the National Company Law Tribunal has also been endorsed.

It has also asked for a plan for optimal regulation of prices of medicines, action regarding the repeal of the Drug Control Act, besides improving the control and management of the drug administration.

The petroleum ministry has been asked to improve the energy security climate in the country and introduce a sourcing policy in line with the objective. There should be competition in the oil and gas sectors, with a transparent regulatory mechanism.

The power ministry has been asked to frame rules and policies under the new Electricity Act and get the Cabinet's endorsement of the new rural electrification policy. The go-ahead to the new Electricity Act is despite the Left's opposition to the law.

The communications ministry has been asked to take steps for the manufacture of telecom equipment and electronics hardware. Changes in the spectrum policy for telecom, a new policy for FM Radio and direct-to-home TV are also on the government's agenda.

For the transport sector, modernisation of the railways with special emphasis on computerisation of freight traffic, improved signalling and railway tracks and clearing the backlog of projects have been identified as thrust areas.

It recommends taking up new projects through public-private partnership. Outsourcing non-core railway activities has also been insisted upon.