Private investments need a big push

One year is too short a time to judge the performance of the government given the magnitude of problems the country faces. While the seeds of development have been sown, it will take time to bear fruit. Some green shoots have become visible, such as higher GDP growth of 7.4 per cent, lower inflation, lower fiscal and current account deficit, and surging foreign investment inflows, though industrial growth is yet to take off in the desired manner.

The government remains committed to its goals, clearly visible from the pace of executive and legislative actions being taken. Key economic bills encompassing much-needed reforms have been introduced and many of these have been cleared. The amendments to the Coal and the Mines & Minerals Act herald a new era of competition, efficiency and transparency in allocation of natural resources. The proceeds of e-auctions of coal blocks will be shared with State governments, thus promoting co-operative federalism in true spirit.

The government has laid a strong impetus on infrastructure development in the Railway and Union Budget. Public spend of ₹70,000 crore in infrastructure and policy measures like plug and play approach along with tax benefits to INViTs will help accelerate economic growth. The decision to open FDI in Railways infrastructure is commendable.

There is equal emphasis on other sectors including agriculture, manufacturing and services. ‘Make in India’, ‘Smart Cities’, ‘Skill India’, and ‘Digital India’ have the potential to transform India. All these programmes are aligned to the larger objective of creating opportunities for employment and growth. At the same time, the government is making efforts to create a conducive, competitive and non-adversarial tax and policy regime to build trust and confidence among investors.

Indians are entrepreneurial by nature; they just need a conducive environment, a rational tax regime and capital at reasonable cost. The government has taken several steps to facilitate larger employment and self-employment opportunities. It has made a serious attempt to address the issues and challenges faced by the MSMEs, which significantly contribute to large-scale job creation. Steps towards establishing the Mudra Bank, an electronic trade receivables discounting system, the bankruptcy code and pre-existing regulatory mechanism are some key measures that should ease the regulatory hurdles and financing constraints faced by MSMEs.

While placing emphasis on the growth and development oriented policies, the government has also adopted an inclusive approach. The launch of the Jan Dhan Yojana is a giant leap towards financial inclusion. The government intends to use this as a platform for carrying out socio-development activities such as transfer of subsidies and the roll-out of newly introduced social security benefits of insurance and pension for all citizens.

The government has done remarkably well in terms of foreign policy and international diplomacy. Modi has been a goodwill ambassador for India’s tourism, promoting India’s rich culture and heritage and encouraging pravasi bhartiya as well as foreigners to visit India.In all his international visits, the Prime Minister has given priority to the economic interest of our country, promoting mega domestic plans to attract greater foreign investment inflows. Japan and China have together committed to invest $55 billion in India in the next five years. South Korea has offered $10 billion for infrastructure projects, including Smart Cities and Railways. India has made significant progress in its relationship with the Saarc countries, especially through goodwill gestures like the invitation to the Prime Minister’s swearing-in ceremony, rescue and relief efforts in Nepal, and making efforts to resolve disputes and enhance economic cooperation in the region. Some other notable achievements include winning the presidency of BRICS Bank, settlement of the civil nuclear deal with the US, the development of 3 smart cities with US support, getting Australia and Canada to supply uranium for India’s nuclear energy needs, the defence deal with France involving the purchase of Rafael jets, and the support of Germany in India’s renewable energy plans.

While the government has laid a strong foundation for sustainable growth by laying out a sound roadmap, implementing the same in true spirit remains the key challenge. Private investments need a further push to gain momentum, which can be achieved through timely implementation of GST, clearance of land related hurdles, absolute clarity in tax policies, reduction in interest rates and stimulating consumer demand. We are hopeful the government will focus on accomplishing the work-in-progress agenda through continuous policy action and reforms.

The writer is the president of Ficci