A path to tangible Outcomes

THE ECONOMIC POLICY FRAMEWORK PROPOSED IN FY25 BUDGET MUST REST ON FOUNDATIONAL PILLARS

- MS SAHOO

The Union Budget for 2024-25 proposed an Economic Policy Framework to drive India's economic agenda. For this framework to deliver tangible outcomes within India's unique context, it must rest on six foundational pillars.

Care for time value of money: The framework gets life through economic laws. Most of them assign distinct roles to both authorities and private parties. Typically, they impose mandatory timelines on private parties, often with severe consequences for delays. However, the same rigour is rarely applied to authorities. Timelines, where prescribed for authorities, are generally directory, with no consequences for non-compliance. Delays in approving transactions, issuing licences, enforcing contracts, resolving disputes, or concluding enforcement actions, undermine the economic value at stake.

To address this, decisions such as approvals, licences, and appointments must adhere to strict timelines, with provisions for deemed approvals if the authority fails to comply. A noteworthy example is the recent amendment to the Competition Act, 2002, where combinations are deemed approved if the authority does not decide within 21 days of receiving a notice. Economic laws must mandate timelines for every activity of an authority: investigations concluded within X days; charge sheets filed within Y days of completion of investigation; trials completed within Z days of charge-sheet filing; appeals disposed of within Q days of filing, with consequences for the failure.

Just as the law penalises individuals for obstructing public servants in discharging their duties, a failure by authorities to deliver services within prescribed timelines should be viewed as an obstruction to business and subject to penalties. A shift from open-ended, discretionary timelines to mandatory, enforceable deadlines, backed by provisions for deemed approvals, will instill a sense of the time value of money among the authorities.