Election season saw an ideological debate – but economic growth is a thing of consensus – its time for India to shift focus back to progress and development.
- India has asserted faith in the current leadership to take the nation towards next phase of growth.
- The global landscape looks at the continuity in leadership as political and economic stability.
- Modi’s re-election soon inspired best wishes from world leaders who see him at the center of global interest in India as a major trade partner.
- The government expects a $5 trillion economy by 2025 but a mixed review in their first tenure, BJP is looking to restore the growth rate of the economy.
With two months of political drama over, Narendra Modi is all set for his 2nd run as Prime Minister of India. During the staggered election season to form the 17th Lok Sabha, political narratives took the driver’s seat. Economic focus and reform execution took the back seat.
But with the majority re-election of incumbent Prime Minister, India has asserted faith in the current leadership to take the nation towards next phase of growth. PM Modi can be credited with being the man who has put India firmly as a super power on the world stage.
Modi as PM is good for India’s global image
PM Modi’s persona as a strong and decisive leader is at the center of this global interest in India as a major market and trade partner.
What needs Government focus?
India being the world’s fastest growing economy ever since 2017 is on the verge of becoming 5th largest economy in the world. The government is expecting a $5 trillion economy by 2025 and a $ 10 trillion economy by 2030.
After getting a mixed review in their last tenure, what exactly BJP needs to work on for business and economic stability this time?
GST structure needs improvement
Introduction of GST resulted in 50% increase in revenue for state governments. But the new tax structure was confusing for small businesses.
BJP has promised to lower the tax rate to reward honest tax payers and improve compliance. BJP has also stated in their manifesto that GST process will be simplified by engaging in dialogue with all stakeholders.
Increased flow of Foreign Investment
According to government sources, FDI has increased by 50% in last 5 years. Almost 90% FDI approvals are now through automatic route.
Credit of this growth is given to the “Make in India” scheme which included initiatives like Digital India, Start up India and Skill India.
In his second term, PM Modi is expected to continue the pattern of opening the market and enhancing global trade relations. BJP-led government is expecting a whooping Rs. 100 lakh crore capital investment by 2024 in infrastructure sector.
Ease of Doing Business
India, currently at number 77 in ease of doing business index, is expected to reach in top 50 by 2024. BJP wants to make India a global manufacturing hub by strengthening of companies act. With an eye on industry 4.0, Modi government is all set to announce a new industrial policy to improve competitiveness of manufacturing and services.
The government is also gearing up for technologies like artificial intelligence and electric mobility. BJP has also promised to invest in creating clusters/networks to take on the world’s best. Public procurement and government incentives will be used actively to build up these clusters and encourage job creation.
Relief needed for MSMEs
For the MSME sector, 2014-2018 was a challenging phase. First demonetization and then GST made functioning of these businesses very hard. Now, after the 59 minute loan scheme, BJP is set to introduce “Guaranteed loan scheme” for MSME. They aim to take this credit amount to 1,00,000 crore by 2024.
Government plans to build 150 technology centres by 2024. With focus on A I, robotics, Blockchain, and zero defect zero effect. National Traders Welfare Board will be established with a national policy for retail trade. There will be Rs. 10 lakh accidental insurance for traders registered under GST. A merchant credit card will also be introduced.
Startup ecosystem needs a fresh push
For entrepreneurs, PM Modi has promised a collateral-free credit upto Rs. 50 lakh, new “seed startup fund” of Rs. 20,000 crore. StandUp India inititative is also expected to launch for SC, ST, OBC and economically weaker sections to support their entrepreneurial ventures.
For North-eastern states “entrepreneurial northeast scheme” will be introduced to provide financial support to the micro, small and medium industries and for employment generation.
The task is cut out
All these promises sound great on paper, but easier said than done. The dent created by demonetization and GST is still there on India’s job market with 20 million youth dropped out of job in last five years.
Even BJP accepts they have to work very hard in solving the unemployment issue. BJP leader Subramanian Swamy accepted the weak macro economy performance and called it meager.
The increase in FDI was a huge positive for the Modi government. But now all eyes are on PM Modi as India puts its hopes on the BJP government to take it forward into a new era of growth and global influence.
- BJP stated in its manifesto that GST process will be simplified by engaging in dialogue with stakeholders.
- The government expects a whooping Rs. 100 lakh crore capital investment by 2024 in infrastructure sector.
- Government aims to create business networks through public procurement and government incentives to encourage job creation.
- Modi government is set to introduce “Guaranteed loan scheme” for MSMEs with aims to take the credit amount to 1,00,000 crore by 2024.