By using the term "bonded slave" in his speech at the conclusion of the trust vote, Prime Minister Manmohan Singh eloquently expressed his feelings during the four years of ties between the United Progressive Alliance (UPA) and the Left parties. The pioneer of economic reforms in the 1990s, Manmohan Singh was expected to push forward the reform agenda during his tenure as prime minister but was hamstrung at every step by the Left partners.

Having won the trust motion, it will be interesting to see how the prime minister and his Finance Minister P. Chidambaram use their newfound liberation to deal with the economy. At the same time, it will not quite be an untrammeled freedom. With general elections under eight months away, the Congress party will be keeping a close eye on policies that could impact on the polls. So the chains of bondage have not been completely removed for the prime minister, as he remains a slave to the compulsions of electoral politics.

Even so, Manmohan Singh knows that the eight months left of this government's tenure will be long enough for him to push through a slew of measures that will help bring the government's exchequer back to an even keel. As for the economy as a whole, much will depend on the global situation, especially crude oil prices over which he has little control.

The first step that the government is expected to make to shore up its finances is to bring what is called divestment of stake in public sector units back on the agenda. The process of privatising sick public sector units or selling equity in large state-run enterprises had become a dead issue under the UPA government, owing to the blanket ban imposed by the left partners.

Contrast it to the frenetic sell-offs made by the previous National Democratic Alliance (NDA) government with the then divestment minister Arun Shourie even trying to privatise the strategically important oil marketing companies. Though that might have been an extreme approach, the fact is that the now-defunct disinvestment commission had made a series of detailed studies of public sector companies along with recommendations for restructuring, strategic sale of equity or outright sell offs.

The quick approach would be to blow the dust off these reports, update them and take some quick action to dispose of those government enterprises that are not worth operating by the state. This would immediately give some relief in providing revenues to Chidambaram at a time when soaring oil prices are leading to huge foreign exchange outflows to purchase crude oil abroad - and adding to the losses of oil retailers.

Another issue close to the prime minister's heart is opening up of the retail sector which has so far been liberalised partially by allowing foreign equity for only single brand retail companies to open stores in the country. This is, however, political explosive reform, as some say it will affect millions of small retailers. Surveys show they India has the largest number of such mom and pop stores. 

Protests of small retailers have already forced Uttar Pradesh Chief minister Mayawati to clamp down on the spread of Reliance Retail, led by billionaire industrialist Mukesh Ambani in her state. In the long run, large retail stores will come as a boon to farmers who will have assured buyers for this produce and without much effort. But in the short run, there is worry over the possibility of large number of people employed in small shops becoming jobless. The need to bring in this reform in a carefully phased manner cannot be over emphasised in view of the massive number of families who rely on the retail trade for their livelihood.

As for the financial sector, there are a host of measures that need to be taken to complete the reforms agenda in this area. Even in this case, however, it is not certain that the UPA government can push all the pending matters. The bill to create a pension fund regulatory authority, for instance, was stalled due to opposition by the Left parties. But whether other political parties in the coalition will agree to the provision of allowing investment of pension funds in equity markets is a moot point.

It is, indeed, a legitimate concern because equity markets are riding high now but any failed investment in the stock markets could cost pensioners dearly. Both the prime minister and the finance minister will have to ensure that sufficient checks and balances are kept in the legislation to ward off any such concerns. Otherwise, the pension fund bill is going to remain in the doldrums.

The bill to raise the foreign direct investment ceiling for insurance companies from 26 percent to 49 percent, however, can be pushed through quickly. Raising the equity stake for foreign players will enable the much-needed infusion of funds into the insurance sector. Besides, it is not expected to make much of a difference to actual operations of these companies in India.

Similarly, another reform that needs to be given a high priority is to allow shareholders in private banks voting rights proportionate to their equity stake. Currently, the voting rights are capped at 10 percent though they may have a much higher shareholding. These are certain issues that are constraining the flow of funds in the banking sector and a speedy resolution to them is urgently needed.

Apart from all these specific measures, the prime minister will feel like a liberated man because of the freedom from being chained by the constant niggling and nagging by Left parties over every aspect of economic development. One must respect the fact that as the person who launched economic reforms as finance minister under the Narasimha Rao government, Manmohan Singh tried to give the policies a human face.

In charting out a route for the economy to sustain its high growth path, he is not likely to forget those at the lowest rung of the ladder. It is a different matter that the package for suicide hit farmers in some parts of the country was not much of a success. But a massive farm loan waiver scheme worth over $16.5 billion and benefiting some 40 million farmers followed. So the economist in Manmohan Singh will look at macro-level reforms that can reduce poverty, rather than merely giving a boost to stock markets - which have already given their thumbs up to the trust vote in favour of the UPA.

Now it is for the prime minister and his admittedly capable team of advisors - often referred to as the "dream team" - to move ahead with speed and resolution to complete the reforms agenda of this government.

(Sushma Ramachandran is an economic and corporate analyst. She can be reached at sushma.ramachandran@gmail.com)