Reforms? What reforms?

Now that the UPA government has survived, there is the usual babble about "pushing ahead with reforms". What reforms are people talking about? Can you imagine any government cutting subsidies or changing labour laws in the run-up to elections?

Many reforms require legislative approval and are time consuming. Unless the market rally continues, disinvestment may not be attractive. Not least, the government cannot move an inch if any measure offends one of the numerous small groups whose support it garnered in order to survive.

Even the survival of the government for long cannot be taken for granted. So, talk of a burst of reforms that will lift the stock markets is just hot air. What will lift the markets is the decline in oil prices (which I had predicted) and a return of net FII flows later in the year.

More on the prospect for reforms in ET's debate last Tuesday.