Narendra Modi's rise as the BJP's champion in the 2014 elections has come as a blessing for the minority

government at the Centre. Any move by any non-BJP party that is likely to destabilise the government would immediately be damned as a move to help Modi. So scared is the Samajwadi Party of such stigma thus that it suffers Beni Prasad Verma's insults in silence and dare not withdraw support for the government. The logic works for other parties as well. This stability gives the government space for new policy manoeuvre. It is time to be bold and take tough decisions to revive India's growth, strengthen macroeconomic balance and stem the rupee's slide. Grow, to stabilise rupee Growth and the rupee's value go together. A growing economy would export more, draw in more direct and portfolio investments and create positive expectations, paving the way for more and cheaper foreign loans. Fast growth would also yield strong productivity gains. All these would strengthen the rupee. And, equally important, shield the rupee from excessive negative speculation. A prime source of macroeconomic imbalance is the fiscal deficit. Excessive government borrowing creates excess demand, which results in inflation and greater imports, leading to widening of the current account deficit. Since last September, when P Chidambaram was brought in as finance minister, the fiscal deficit has been reined in. And people trust him to stick to his fiscal targets, in spite of the temptations of a preelection year. But he needs political support to contain the subsidy burden on fuel and fertiliser that will rise with a lower rupee. Raise these prices. This will help contain the current account deficit as well. But inflation and the current account deficit have other drivers, too. Food inflation cannot be contained by repressing demand in general. The first step to hold food prices is to throw out the food minister and his secretary. These enemies of the people sit on 78 million tonnes of grain, making the UPA-II the biggest hoarder ever in India's history. Thanks to them, cereal prices are up 16%, jacking up overall inflation, stifling growth and eroding the rupee. Vegetable prices have shot up. Bribe states to exclude perishables from the ambit of the middleman-friendly Agricultural Produce Market Committee Act. This would enable farmers to sell directly to large buyers, who could transport fresh produce fast/in refrigerated vans to consumption centres. If the high prices consumers pay filter through to farmers, instead of worsening the middlemen's lipid profile as of now, output would go up and prices come down. A major constraint on growth is power. Nearly a quarter of India's installed generation capacity today lies idle, thanks to paucity of coal and gas. Scrapping state monopoly in coal and freeing Coal India's subsidiaries to compete would boost coal production, yield more power and cut down on the $20-billion import bill on coal. This, of course, takes guts. Large projects stay stalled. Inertia must go on clearances and on project implementation. UPA-II

which leaves Singapore and Dubai to set the rupee's rates. the Indian equivalent of the world's giant pension funds that scour the globe for optimal returns — with the difference that the EPF does not invest even one rupee in stocks. but linked to medium-term performance. Only some bit of insurance money goes there. ambitious youngsters who want to prove their mettle. Structure its managers' compensation on the lines of Canada's pension fund: liberal. . Appoint dynamic young performers. We need sacking. Tiny inflows and outflows can make the Sensex yoyo. Allergy to Modi has increased the range of the possible for the government. as on small savings. Tap domestic savings India is unique among the world's large economies in keeping domestic long-term savings away from its capital markets. What the absence of serious domestic money does to stock markets is to make them hostage to the whims of foreign fund flows. The big daddy of organised sector savings is the Employees' Provident Fund (EPF). Politics is the art of the possible. These sacked worthies can worm their way back into the woodwork later via the Central Administrative Tribunal. In the meantime. That is sense. Hand over the money to a sovereign wealth fund. What remains is the shallow currency market. shunned by the trade union-dominated board of trustees that runs the EPF. Allow wider participation. They want government subsidy to augment returns. but that is later. All this would revive confidence and rein in inflation. besides funds from the still-small New Pension System. Sack the idiots who head prestigious projects. Offer the EPF a fixed rate of interest on long-term deposits. But this would not automatically translate into lower volatility in the stock or currency markets. The EPF has a corpus of Rs6 lakh crore. we need some financial engineering.sets up monitoring committees to get projects going. not proper fund management with diversification of risk. That calls for another fix. A part of it must go outside India and a good part of it must be in equity. let in more instruments and permit longer trading hours. they would have vacated space for dynamic. or about $100 billion. instead. talk slick but cannot deliver on the vital public investment that will crowd in private investment. What it needs to muster are boldness and imagination. So.