The legislative gridlock is likely to continue till the second half of 2016 when the BJP is likely to gain seats in the upper house Rajya Sabha so as to push through long delayed reforms. The administrative gridlock is primarily due to bureaucratic red tape. Inspite of the Govt. pressing for faster clearances & implementation, the wheels of Govt. do not seem to be picking pace. There have been reforms in power sector particularly renewable energy as also in the railways.

The depressed oil prices has been an unwitting Godsent gift but the Govt. needs to leverage this huge savings judiciously. Low commodity prices would normally benefit manufacturing sector. However, due to a deep malaise within this sector, not much benefit is being accrued. Since private investment has lagged behind, the Govt. has increased public spending to boost the economy. Whether this increased spend will translate into GDP growth is anyone's guess. The Govt. ought to initiate structural reforms in agriculture so as to boost the one sector that drives the economy significantly. An increase in farm output directly translates into higher GDP growth & gives a boost to the economy. Considering the gloomy external environment, exports have nosedived and any meaningful uptick is unlikely given the depressed global scenario. Chinese yuan devaluation would severely affect Indian exports and the domestic economy. Cleaning up bank balance sheets should be priority given the fact that banks are a direct proxy to the growth in the economy. Recapitalising banks by utilising the funds saved in oil import bill might be a sensible option. Even though the global oil price has fallen precipitously, Indian retail prices have not fallen in tandem. Increased levies by the Central Govt. has enriched the Govt. coffers. Hence, one might have to wait for the second half of the year to witness any meaningful uptick in the economy. Till then, one can expect the Budget to lay emphasis on macros & superficial sops. The domestic defence industry is one area which is likely to witness increased focus & activity besides agriculture.