3 years of Modi - how has business landscape changed?
As NDA government is now on the mature end of its tenure, it's not only India which is watching its every move but the entire world is. Demonetization, smoothing roads for foreign direct investments, a single unified GST policy, Make in India, Digital India; the journey till now has been eventful but the acid test begins now. Here's all that you need to know.
Beware of the short-term disruptions
Economists agree that GST is going to be beneficial for India in the long run and it's remarkable how NDA government has managed to unite all the states together to adhere to it. The question now remains, is how soon are we going to see the benefits and what stance the government will take to protect the economy against GST's settling down tremors.
The country's backbone is still not strong enough
India still needs to meet its infrastructural needs, the NDA government has been pushing towards it and the coming years will mark how much it has achieved. A strong economy and a poor infrastructure are not terms that go hand in hand. Private investors should be encouraged to chip in and the NDA government should make this its top priority to fuel growth.
Not China, but a guidance mechanism would be beneficial
While the government is getting bullish on its "Make in India" initiatives, it should also take a look at safeguarding Indian start-ups. Enterprises have been crying foul over how foreign entities are doing brisk business and they have been left to hang out, dry. Government's plans to prioritize Indian companies in tender bids don't apply to this bunch, so measures should be devised.
NPAs can't harrow the economy forever
Amendment to the Banking Regulation Act was a welcome move but having PSUs burdened, with NPAs and bad loans worth Rs. 6 lakh crore, is not going to do the economy any good and should be dealt with. As long as the banks are not given a fresh start, the economy will continue to balk under the pressure and businesses will suffer.
New India has to be tax-compliant
Arun Jaitley said, "Our target has to be to make sure India as it evolves from a developing to developed economy (also changes) from a tax non-compliant society to a highly compliant society." GST, Aadhaar linkage should help but the problem is a deeply rooted one; NDA should focus on nurturing the fact that tax compliance is a civic duty and not an option.
Disinvestment and reinvestment needs to be weighed upon
For 2017-18, Government plans to raise Rs. 72,500cr from disinvestment to fund its infrastructural and developmental needs but at the same time, it is injecting money on defunct state-run organizations, like Air India. Its recent moves of disinvesting have not gone unnoticed but the question remains as to why relics of the past, such as Air India, are not being put on the auction-block.
Rural economy is still the priority
Digital India should make its way to the rural sectors, as it still depends on physical cash. India is an agrarian economy and reforms would be successful if only it manages to percolate entirely to the grassroots level. The government should come up with initiatives, like Internet Sathi run by Google, to make people in rural sector aware of the benefits of going cashless.
Modi is in the driver's seat
The run, till now for the NDA government and Modi, has been an eventful one and the economy is performing admirably. Now, the challenge is not only to facilitate growth but it's also to maintain pace and to ensure that it doesn't hit a roadblock. What will happen in future of Indian economy will largely depend on how Modi government maintains its momentum.
