By Prekriti Malhotra
Edited by Madhavi Roy, Senior Editor, The Indian Economist
In the recent Ease of Doing Business Index released by the World Bank, India stood at 142. The Modi Government just wouldnt settle for this rank; they are doing everything to convey to the world that India is not the same India which was renowned for red tapism, bureaucracy and inspector raj. From kick starting the Make in India Campaign to ending the Inspector Raj system, the Modi Government has been on a reform spree to make India an investor friendly destination. So heres an insight into all that the Government has done over the past few months to go up from being at rank 142 to being in the top 50.
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Tax Reforms
What was considered as an impossible tax reform is now in the pipeline. The Government has decided to table the Goods and Services Tax (GST) Bill in the winter session of the Parliament. GST is a Value Added Tax (VAT) to be implemented in India, which will replace all other indirect taxes levied on goods and services by the Indian Central and State Governments. It has a broad base and it simplifies the tax structure to a great extent. By reducing the leakages in the tax system, it will help boost the GDP growth by 1% to 2%. GST is considered a sort of a magical wand. It benefits the producers and the consumers creating a win-win situation on both the sides. But considering the nature of Centre- State relationships, not much can be said.
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Labour Reforms
The Government has brought about major labour reforms to get rid of the inspector raj system and to bring transparency to the system. From making amendments to the outdated Factories Act and Apprentices Act, to introducing new labour schemes, it has all been included. The reforms include schemes such as Shram Suvidha Portal (a unified web portal where employers can get registered with a unique Labour Identification Number) and Universal Account Number for Provident Fund (a System under which employees can continue with the same PF number when they change jobs). The schemes help not just the companies, but the employees and labour class as well.
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Reforms In the Petroleum and Gas Sector
The Government has decided to free diesel pricing from state control which was an end to one of Indias costliest subsidies. The Government also cleared a delayed increase in gas prices, hiking by one-third the amount paid to natural gas producers to encourage exploration which in turn will reduce our dependence on imports. The Government has also decided to sell a 5% stake in Oil and Natural Gas Corporation (ONGC) in order to raise $3 Billion in order to reduce the fiscal deficit.
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Privatization in the Coal Industry
Despite being a nation with the worlds fifth largest coal reserves, India is the third largest coal importer. This is mainly because of the dysfunctional coal sector. In order to break one of Indias largest monopolies, Coal India, a big step by the Government has been the privatization of the coal sector. The private players shall participate in the process through an e-auction. The reforms are essential to reduce our dependence on imports and revive our coal sector to meet the growing energy demands of our economy.
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FDI in Insurance
The Government has decided to raise the Foreign Direct Investment (FDI) in the Insurance sector from 26% to 49%. This is a move more than welcome by our country. It brings along several benefits such as increased capital inflow, increased insurance penetration and job creation. It was a long due reform undertaken by the Government.
With the Make in India mission and Maximum Governance, Minimum Government vision, the Modi Government has set out to establish Brand India. However, in India, it has always been politics dominating economics. Only when that changes and when we get rid of the internal irregularities, will India emerge as a manufacturing hub. Considering the recent election results in Maharashtra and Haryana, the Sensex touching new heights and the much needed reforms, the Modi wave is moving across the entire country, but to establish Brand India, the Modi Wave has to move beyond national boundaries to the rest of the world.
Prekriti Malhotra is a student of Commerce at Shri Ram College of Commerce, Delhi University. As a co-founder of a Start-Up Society and an editor of the College magazine, she loves coming up with new creative ideas. She writes about anything and everything that catches her eye. Community service is something she finds solace in. She is a passionate tennis lover and Roger Federer is someone who inspires her. A foodie, she loves to try out new places to eat. She spends her leisure time baking cupcakes and brownies and searching for new and interesting ideas on the Internet.