A new phase of policymaking

A committee-based approach has helped the government usher in many reforms

- A K BHATTACHARYA

Economic policymakers in the Union government appear to be on a high.

The recent notification of the four Labour Codes, passed by Parliament more than five years ago, is perhaps the most immediate reason for coming to such a conclusion. Of course, the gazetting of the much-awaited Labour Codes, subsuming 29 existing labour laws after their simplification and rationalisation, is a reasonable justification for believing that the Narendra Modi government has become a little more reform-friendly than in the past.

But the change in the government's engagement with the economy’s need for reforms is more nuanced than how analysts have so far perceived it. What happened with the Labour Codes last week is also a reflection of a changed equation between India’s political economy and the pace of its economic reforms. This shift has been gradual, beginning soon after the Modi government was formed for its third five-year term in June 2024. Its contours and character were not immediately noticeable. But they are becoming obvious when you look back at the many decisions that the government took over the past 17 months.

About two months after its formation, the Narendra Modi government took a big step to fill several senior positions in different Union ministries with candidates from outside the government system. A notice inviting applications for 45 posts under the government's lateral-entry scheme was issued on August 17 in 2024. But two days later, the notice was withdrawn after political opposition to the idea gained momentum both within and outside the government. That notice was not just withdrawn, but the entire idea of strengthening the civil service by inducting private sector talent was buried. It was a setback for reforms, sending the message that the government did not wish to undertake any reforms that could upset the civil servants.