Myth Number 1: Pump-priming, or increasing government expenditures dramatically, will help boost demand and hence economic growth. This, incidentally, is the prescription of most chambers of commerce.

Reality: Apart from the fact that the government doesn't really have much room for manoeuvre -- committed expenses on interest, defence, salaries and subsidies add up to more than total revenue -- the impact itself is fairly limited. Even if you assume that the government increases outlays by, say, a stupendous Rs 20,000 crore over and above what it normally would have spent, given the "incremental capital output ratio", this implies an additional output of justaround Rs 5,000 crore, or around 0.3 percent of the total GDP. Ironically, various government spokespersons have used precisely this argument while arguing that the impact of the sanctions - roughly $4 billion, or Rs 16,000 crore - would be minimal.

Besides, as former finance minister P. Chidambaram proved, the real constraint to growth is not the lack of money, but the inability to get projects going to spend this money. Just after the Budget, he sanctioned an additional Rs 950 crore for completing a few on-going power projects -- till then the power ministry kept complaining that lack of funds was curtailing its efforts. Just under a year later, the ministry returned exactly half of this amount as it could not utilise the funds.

Myth Number 2: Increasing import duties will protect Indian industry which is reeling under the onslaught of cheaper imports. This, incidentally, is also the approach favoured by the Swadeshi Jagran Manch and will go down well with various BJP supporters. Reality: With the rupeefalling to just under 42 to the dollar, and expected to fall further, local industry's protection levels are roughly the same as they were earlier. More important, of course, is the issue of whether a five to 10 percent duty will deter users from wanting to import equipment. What will determine whether Indian goods will be bought, and this is where local producers especially in the capital goods sector lose out, is the levels of efficiency of the equipment produced as well as the timeliness in executing projects.

Interestingly, the latest to join the ranks of the Reliances and Essars of the world in running down local capital goods suppliers is the public sector Indian Oil Corporation (IOC). IOC blames public sector suppliers such as BHEL and Bharat Heavy Plates and Vessels (BHPV) for setting back its Panipat refinery by around 16 months. While BHEL delayed supply of a captive power plant by over a year, BHPV caused a setback of 16 months by its inability to deliver critical equipment.

Myth Number 3: Thefact that "reforms" didn't slow down during the United Front coalition government shows that you don't really need big parliamentary majorities to go ahead with sweeping reforms. The Congress, in fact, slowed down reforms when it attained a majority in Parliament. In other words, coalitions are better for furthering economic reforms.

Reality: While all governments, with or without a majority in parliament, have no option but to pursue economic reforms, coalitions do not have a better track record when it comes to delivering on promises. Indeed, much of the reason why Chidambaram's "dream" budget turned out to be a nightmare, with economic growth dipping by a third, was the government's inability to deliver on many of its promises.

If you go by the newspaper headlines the day after last year's Budget, what enthused people most were the sweeping reforms in real estate laws (the repeal of the Urban Land Ceiling and Regulation Act), in personal and corporate taxes, and the proposal to open up the insurancesector to private players including those from abroad.

With a serious problem on the revenue front, the government is all set to roll back some of these tax cuts. And while the UF's fiasco on the insurance bill is well known, it couldn't finally pass a bill to repeal ULCRA. But if ULCRA repeal and insurance privatisation is going to be done by the BJP government, what's the problem?

Apart from the obvious one about delays, coalition governments are generally so pre-occupied with fire-fighting that they are hard-pressed to find time to follow through on the details. Why else has something as innocuous as the new Companies Bill not been passed for close to four and a half years? Incidentally, this does not even figure in the legislative agenda proposed for the current session of Parliament. Opposition from Jayalalitha seems to have put paid to the proposed bill on power regulatory authorities and the Swadeshi Jagran Manch is putting up stiff resistance to allowing foreign insurance companies. The issue,actually, is not of majority or minority governments. It is of tough and weak ones. Sadly, more often than not, minority ones tend to be weak ones.