States lead the way in economic reforms
In the fourth quarter of 2016, Haryana, Gujarat and Maharashtra have led the way in making reforms
The Narendra Modi government’s economic policymaking agenda was crowded by a few singularly large actions in the final months of 2016: securing final passage of the goods and services tax (GST), carrying out the demonetization programme, and preparing the 2017-18 Union budget. We have seen a real reduction in tangible action on the wider reform agenda, which my institution tracks in our “Modi Economic Reforms Scorecard". We have not had reason to make any substantive changes to our reform tracker since the middle of 2016. However, we have seen a real uptick during the fourth quarter of 2016 in state-level reforms, particularly from Haryana, Gujarat and Maharashtra. These three states had a combined 12 legal or regulatory reforms seen to improve the business environment. With the Bharatiya Janata Party’s election victory in a number of state elections this spring, notably Uttar Pradesh (UP), there are renewed hopes that other states will follow suit. BJP-led states have tended to reform more aggressively than non-BJP states, with the notable exceptions of Andhra Pradesh and Telangana.