All politics is local. This American political phrase may describe the ongoing Indo-Pak war of words. Amid cross-border jingoism, the Congress party has been portrayed by the ruling BJP as a "Pakistani sympathizer". Over at home, high-ranking officials have been raising national temperature in response to Indian diatribes, something that takes national focus away from domestic troubles in the war on militancy.
Due to lack of reforms, image of the Modi government, one year after taking charge, needs a fillip. A few reform bills have been presented, specifically the Land Acquisition Bill, but they were dead-on-arrival, for the ruling party lacks majority in the upper house. That majority eludes Modi for another year. Meanwhile, India Inc. has been resenting the valuable time lost in Modi following through on his promised measures.
The Modi government now looks set to launch a Labour Bill, which will reportedly introduce the most sweeping labour-related makeover since India's birth and the biggest reforms of any kind since 1991. The proposed measures are being viewed as one of the core bargains fulfilled with corporate India. Besides, they may give a boost to Modi's flagship Make in India campaign.
The issue is a thorny one. World Bank views the Indian labour market as most rigid in the world. The existing labour laws are said to severely subdue the country's manufacturing sector. India's manufacturing sector accounts for only 16 percent of its $2 trillion economy, compared to neighbouring China's 32 percent. Attempts to even tinker at the prevailing policies have in the past drawn strong opposition.
Now Modi sarkar will have a crack at this drag. The information is sketchy, but the labour bill aims to ease layoff regulations as well as encourage contract employment. Among other measures, it will allow companies to lay off up to 300 workers without requiring state approval. To protect contract workers, a longer-duration compensation package of 45 days has been proposed, from the current 15 days.
The labour bill - which, if you ask the business, should have been passed yesterday - faces an uncertain future in New Delhi; while corporate in Mumbai and Bangalore grow more impatient. BJP is not engaging Congress on these reforms; instead they have been demonizing the opposition by hanging a pro-Pakistan garland around its neck.
Feeding unsuspecting public and media some intense xenophobia, perhaps the BJPs bet is that the pro-union Congress would look bad opposing a reformist bill. Time to table that bill, no?
India also seems preoccupied over the critical openings Pakistan has generated on the watch of a self-declared "muscular" government under Modi. These include the Pak-China Economic Corridor, warmer Pak-US relations, and the post-Karzai Pak-Afghan collaboration. Modi's aggressive tone vis-à-vis Pakistan smacked of frustration. However, the three Pakistan-centric developments arguably hold out great promise for long-term peace and stability in the Saarc region which will benefit India as well.
Whatever India's disposition, its wrong for Pakistan to react to Indian salvos. Keep calm and carry on. There are bigger problems at home than a fidgety neighbour playing to the gallery. As for Modi government, it will do well to engage Congress and hash out differences over proposed reforms. Confrontation at home and abroad may not be conducive for Modis development agenda. Pakistan will also do well to look inwards.
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