It has never been an easy journey for the current BJP led NDA government to set economic reforms and changes, as reforms always face staunch opposition in prosperous times. However I quote, as the International Monetary Fund Director Tao Zhang said –“The Indian government has made significant progress on important economic reforms that will support strong and sustainable growth going forward.”(1) Over the past five years the government has undertaken several reforms and among the ones that occupy higher positions on the list are that of the Goods and Services Tax (GST), the Insolvency and Bankruptcy Code (IBC), Foreign Direct Investments (FDI) in a host of sectors and also the “Make In India” campaign that facilitated investments, promoted innovations, nurtured skill development, making India a Global Manufacturing Hub. Nikita Sud, an associate professor of development studies at the University of Oxford in England, tempered the praise for Prime Minister Narendra Modi and said. "There are all sorts of downers in the global economic scenario, but the current government has done a lot to contribute to that."(2)
If we analyze the last 10 years of the UPA regime, we will see that the country had lost valuable time and opportunity to curb the menace of corruption. Subsequently, a series of incapacitating policies brought down the GDP growth rate crashing to its slowest pace of 4.6 percent for the decade followed by adamant high inflation rates which adversely affected every commoner's aspiration. There was a huge decline in investments in the manufacturing sector, mainly caused by the epidemic of scams and a massive slowdown in the industrial sector. In other words, the economic problems were tackled with a timid approach as the then government was busy making populist policies instead of bold policies to win votes leaving the countries growth at stake.
Let us not neglect the fact that it has only been five years of the current NDA government. Hence this article will mainly focus on all the bold policies and reforms taken and managed by the NDA government from 2014 onwards in various sectors/platforms both nationally and internationally.
India has gained a lot of popularity worldwide about its policies and achievements under the dynamic leadership of Prime Minister Narendra Modi. One of the highest discussed achievements of the current dispensation is that of the implementation of Goods and Service Tax (GST). This has brought a qualitative change in the tax system by creating a split of taxation fairly between the manufacturing sector and the services sector. Experts are predicting $15 billion a year in financial gains post implementation of the GST bill. There are more positive aspects to it than the negative aspect as a coin always has its two sides. With time, we will be able to see the bigger picture and it will surely result in economic integration. GST has helped in increasing the foreign investments, putting India in the line of international tax standards, making it easier for Indian business to compete in Global markets.(3)
PM Modi’s bold reforms are making India a business-friendly destination. A huge achievement was marked by the World Bank recognizing India as one of the top improves of the year 2018. Consequently, India climbed another 23 points in the World Bank’s Ease of Doing Business index to 77th place, becoming the top ranking country in South Asia for the first time and third among the BRICS.(4) With this drastic positive jump, PM Modi will now personally review each and every department (ministries) to break into the top 50 ranks in the near future.
At the time when the BJP led NDA government came to power, the banks were on the verge of collapse, as they gave murky loans to shady projects under the political pressure of the previous UPA regime and caused them huge financial failures. Piyush Vedprakash Goyal said: "The UPA government started distributing loans from 2006 and the procedure went on till 2014. The bank losses increased from Rs. 18,000 crore to Rs. 53,000 crore in those years.(5)
The BJP led government tried to resolve the entire mess through Insolvency and Bankruptcy code 2016, a law aimed at speedy winding up of insolvent companies, lowering NPA’s (non-performing assets) and redeploying capital productivity. Later, the Insolvency and Bankruptcy Code (Amendment) Bill, 2017 was introduced in Lok Sabha on December 28, 2017. It amends the Insolvency and Bankruptcy Code, 2016, and replaces an Ordinance promulgated in November 2017. Insolvency is a situation where a company is unable to repay its outstanding debt.(6) The Code provides a time-bound process to resolve insolvency of companies and individuals. The bankruptcy code, therefore, is created to overcome the worst situation faced by the economy. The new code could curb substantially the number of long-pending cases and also ensure quicker resolution of NPA problems of banks.(7)
Another important economic development which has been a top priority for the current government is the liberalization of the Foreign Direct Investment (FDI) norms in various sectors like defense, infrastructure development, insurance, pension sector, e-commerce etc. FDI, being a major driver of economic growth and a source for non-debt, long-term finance for the economic development of the country.(8) CII President Rakesh Bharti Mittal said that the GST, the reforms in Ease of Doing Business, FDI, labor, agriculture, and many other initiatives aimed at improving the overall investment climate and productivity have begun to show its impact. The 8.2 percent economic growth in the first quarter of 2018-19 is an outcome of key reforms like GST and liberalization of FDI norms initiated by the government. According to him, the reforms have also led to increased demand leading to better capacity utilization and higher growth of industries which again is reflected in the growth of manufacturing sector at an impressive 13 percent plus in the first quarter. “A few external challenges remain, in the form of oil prices and hardening interest rates in the US, but our domestic strengths are robust enough to ensure that India would ride over any bumps on the road.”(9)
It can be noted for the fact that the current government has taken many measures for the well being of the common and poverty-stricken citizens, by introducing many new schemes benefitting farms and agriculture, manufacturing sector and industrial sector. One such initiative is of Digital India. Digital India was launched by the Prime Minister of India on 2nd July 2015 with a well-defined objective of connecting rural areas with high-speed Internet networks and improving digital literacy. The vision of Digital India is inclusive growth in many areas such as electronic services, products, manufacturing and job opportunities etc. However, the ‘Digital India’ is in an infant stage, so there is an enormous unfinished agenda for India and it is an area of serious concern to address it effectively and expeditiously. (10)
In 2014, the PM Modi in his Independence Day speech announced the famous PRADHAN MANTRI JAN DHAN YOJANA, which ensures a bank account to every Indian. This was another massive and commendable step, as around 15 million saving accounts were opened with the participation of banks. The mission is progressing with the aim to be a part of transformation which has been promised to all. While the future of the banking sector is increasingly becoming digital, it ensures that these innovations and reforms constructively impact the lives of those who had remained outside the environs of the banking system, thus fulfilling the promise of Antyodaya. We need to comprehend that in a vastly populated country like India, for such considerable reforms to take place, it takes time and public participation. Though the first phase was triumphant, in order to ensure that there is a sustained momentum, there has to be an extensive effort (11) and participation from every sector of the society. From 2014, we can see that the current government has launched enormous schemes for the social welfare of the country and each and every scheme/policy had positively touched the lives of the people and the economy.
Another major program undertaken by the Prime Minister of India is the “Make in India” initiative; with a view to revitalizing the country’s once-ailing manufacturing sector under the UPA regime and was formally launched in September 2014. The primary objective of the program is to-Make India a manufacturing hub, increase manufacturing sectors share in the country's GDP from 16 percent to 25 percent by 2022, concomitantly creating 100 million jobs. Alain Spohr, Managing Director, India & South Asia, Alstom shares, "The Government’s visionary Make-in-India program brought together businesses and consumers towards a common goal of nation-building. This added to the Prime Minister’s push to simplify investments and procurements in the country enabling most sectors to create business opportunities within the country and even attracted international businesses. India’s rank in the ease of doing business was an affirmation of this very change. Not only did this created a momentum in the creation of jobs, but also brought the focus back to the need to bridge the gap between the skills imparted in college vis-à-vis that required in the market. We see the Government’s Skill India initiative working to bridge this gap in partnership with private players. Public-Private Partnership is the most effective tool to empower such movements and Alstom has been committed to supporting both these Government initiatives."(12)
CONCLUSION :
There is no doubt that India’s economy is growing under the leadership of the current government. With courageous policies, changes and significant infrastructure development, which is a key driver in the economy has set a mark towards transformation to a ‘NEW INDIA’. From roadways, railways, waterways there has been a constant development in transforming the urban cities to smart cities. Even the development in the sector of rural India is also very evident. The NDA government has successfully implemented the “Swaminathan Commission report for improving the living standards of farmers and a huge upliftment of the farm sector. The government has also introduced the Model Agricultural Land Leasing Act, 2016 to all states which is a very important step in agricultural reforms. NDA government has achieved quite a lot in 5 years as compared to any previous governments. The government has taken many valiant steps without considering the political outcome, and this is something that needs to be applauded. There has been a series of reform in all the sectors of the country.
I cannot conclude the article without discussing one social campaign which deserves a lot of appreciation, I;e the “Clean India Mission” or the Swachh Bharat Abhiyan. Though still a lot has to be done but starting such a nation-wide campaign itself is historic. Not every policy is a Five-year policy. In a democracy, policies have their own course of time; some policies take more than a decade. In my personal experience, during my stay in Taiwan in 2017, while talking to many Taiwanese I learned how it took them more than 15 years to make the country as clean as it is today. India is a vast nation and our current government is doing what it takes to make the citizens of India understand the importance of cleanliness. Now it’s an individual Indian’s duty to follow, support and help the current government in this campaign to make India a clean India.
Lastly, I would like to conclude by drawing your attention to the most historic move of the BJP led NDA government, I;e of Demonetization. I have decided to write about Demonetization in my conclusion as there are tremendous speculations mostly negative about this step taken by the government. As many criticized about the move, let me inform the readers about the fact what a valiant move it was and how it will do betterment of the future economy. This move was taken to make the Indian economy bigger, clean and transparent. Every citizen of this country participated in this reform of a positive nation building. The government has successfully weakened the foundation of black money. There has been a significant increase in the money flowing to the government exchequer rather than to an illicit parallel economy, impacting the vicious ecosystem that funds extremists, terrorists, and other anti-social elements. Money flowing into the banks has also paved a huge way for banks to offer subsidized loans for the marginalized public.
The government is now able to use the funds for social and economic development projects. However, there is a huge challenge for the current government to solve the issue of unemployment in the country and serious initiatives like Make in India, Skill India, and Start-up India can be a silver bullet in overcoming this challenge. There is no doubt that the government has taken a number of measures to restrain the problem of unemployment, for example, the Ministry of Labour and Employment has launched a National Career service portal, Pradhan Mantri Kaushal Vikas Yojna(PMKVY) and all such measures have helped to lower the unemployment rate in many sectors. Furthermore, the government can make its teaching and academic curricula more employable-driven and human capital can be developed only when extensive investments are made in education and accessibility to tertiary education is guaranteed. Singapore has launched certain programs to establish partnerships between domestic and foreign universities to promote tertiary education. India could learn from such undertakings and India also needs to learn to reform its archaic labor laws which currently proliferate only to contractual jobs instead of permanent employment. The Retail sector is a labor-intensive sector, and foreign investment in this sector and related sectors like apparel manufacturing and logistics will further provide the necessary boost. Similarly, allowing foreign investments in sectors like legal and accountancy services will create employment as more foreign firms will move to India along with Infrastructure investments, which can also be utilized as an engine of job creation. Finally, India needs to bargain hard with the US for easier work visa norms so that pressure of some unemployment can be eased out to an extent. With such policies and approaches, the government can more effectively address issues related to unemployment13 arising out of an ever growing population. The vision of the current government of a cashless economy will prompt people to move towards the digital economy where the transactions will be much easier and eventually the circulation of black money will be curbed completely. It will be sensible for us to take a long time view and with its own course of time; this development will give a new momentum for an organized and developed economy making India a strategic and economic superpower.
External Links :
2) Modi gets good grades from economists for 4 years of reforms.
10) DIGITAL INDIA-MAJOR INITIATIVES AND THEIR IMPACT: A CRITICAL ANALYSIS Dr. Shekhar Srivastava Associate Professor International Institute for Special Education