New Delhi: In November, the government had succumbed to pressure from Trinamool Congress and held back notification of rules permitting 51% FDI in multi-brand retail. Even in the case of aviation, the government did not move for months due to pressure from Mamata Banerjee. But this time on, the rollout of reforms is a different story; one that is defined by decisiveness. In fact, the government is already into the post-Mamata phase. 
    As part of a flurry of reforms, PM Manmohan Singh has asked the ministerial panel on land acquisition to thrash out a consensus when it meets next week. Besides policy measures, the government is planning to raise the price of levy sugar — what it pays to sugar mill owners for maintaining adequate stock — by Rs 3 a kg, the first such increase in almost a decade. With fiscal prudence being in vogue, the burden is likely to be passed on to those buying sugar from ration shops. 
    The boldness is significant also because it seems to underline the irrelevance of Mamata and naysayers. For a government which kept putting off urgent measures at Trinamool’s instance, the sudden shift into aggressive gear is stunning and raised the estimate that it may press ahead on the road of fiscal correction in order to show munificence when the budget is presented in February, in what will be this government’s last full-scale financial statement. 
    Congress circles are already agog with the expectation that improved coffers following the rollout of reforms may help P Chidambaram unwrap a mega-populist package in the budget. Speculation is focused on the food security law. Designed to be the kind of game-changer that the Rs 70,000 crore farm debt waiver turned out to be in 2009, the proposed law entails an annual expenditure of roughly the same amount: something that the cash-strapped exchequer is in no position to support. 
    The FDI notifications formally clearing the way for the entry of global supermarket chains come along with the likely decision not to curb FDI in pharmaceuticals, although it was not clear whether the government was ready to dust off the long-pending proposal to raise the cap on FDI in insurance and open up the pension business. On the infrastructure front, government is ready with a Rs 1.2 lakh crore loan restructuring programme which will help lossridden power distributors clean their books. 
    The policy activism has been goaded by the risk of a possible ratings downgrade that will throw India back into the league of countries issuing junk grade bonds. 

    Apart from averting a possible downgrade, a reduction in the subsidy bill is also seen as a step towards preparing the ground for the Reserve Bank of India to cut policy rates. RBI has made monetary easing contingent upon a clear fiscal consolidation plan. Following the increase in diesel price by Rs 5 a litre and an annual cap of six subsidized cooking gas cylinders – which will prune subsidies by Rs 20,300 crore – RBI limited itself to reducing the cash reserve ratio, or the amount of cash that banks set aside, by a quarter of a percentage point to inject Rs 17,000 crore into the banking system and signal a rate reduction.