With the change in regime there is a pertinent remodel to India’s investment approach. Most of these initiatives are indeed novel – while few are considered bold. The bold policy initiatives such as the demonetization are essentially an outcome of the regime vision to provide a "bigger spurt" to the economy by plugging leakages. NRI Achievers presents here an overview on the new technologies investment opportunities available pan India.
With a self-sufficient agriculture sector, a multi-faceted Industrial sector and a developing financial sector India, a trillion dollar economy is offering new business opportunities for the Indians as well as the world. According to the NITI Aayog CEO Amitabh Kant, the chief of government think-tank, “While we are growing at about 7.5 - 7.6%, India must be very hungry and ambitious for growth of 9 - 10%". The structural reforms aim to achieve high rate of growth. India also needs to have consistency and predictability in the policy regime, coupled with other factor of market reforms. As far as the latest campaign Demonetization is concerned Indian Prime Minister Narendra Modi is being referred to as a radical reformer. So when, the new model provides an exhaustive list of economic, environmental and social measures – lets us briefly summarize them here:
Jan Dhan Yojana – Perhaps of the initial scheme by the Modi government, the Jan Dhan Yojana or the ‘Free’ bank account for poorest Indian, allowed everyone to open an account in a bank and only in a fortnight after the launch, the yojana entered the Guinness Book of World Records for the maximum number of accounts opened in a week. This scheme is considered as a big boost in moving towards direct subsidy transfer and plugging the leakages. No doubt, the Pradhan Mantri Jan Dhan Yojana has met with huge success ever since it was launched by Indian Prime Minister. The Government has even left no stone unturned in ensuring success of the scheme. Perhaps when demonetization now in full swing, one can estimate that the Jan Dhan Yogana was not introduced in isolation.
Make-In-India Scheme - Make-in-India was launched in 2014 as an ambitious initiative to encourage multi-national, as well as national companies to manufacture their products in India. The main reason for launching this initiative was to pave way for Foreign Direct Investments (FDI) by luring them to the most productive economy of the world. To highlight the fact, the net FDI inflows into India hit an all-time high in January 2016, at $3.0 billion on a 12-month moving average basis. The Government has liberalized foreign direct investment norms for NRIs and overseas citizens of India (OCI) as it aims to increase capital flows into the country. According to the PM, “The amendment in FDI for OCIs, NRIs & PIOs will lead to greater forex remittances & investment.”
Stand-Up India- This scheme was launched in early 2016 and was aimed to support entrepreneurship among women and SC and ST (Scheduled Castes and Scheduled Tribes) communities. Under this scheme, loan between Rs. 10-100 lakhs were provided for setting up any new enterprise. The Standup India scheme sets a target of creating 2.5 lakh such entrepreneurs across the country.
Bankruptcy code –To lower down the non-performing assets the government made few amendments of existing bankruptcy laws and now the Code creates time-bound processes for insolvency resolution of companies and individuals.
Demonetization – Announcing this radical move, which will change the content of domestic lockers forever, the Indian PM said on the night of 8th December, “For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development.” He said. “To break the grip of corruption and black money, we have decided that the currency notes of Rs. 500 & 1,000 presently in use will no longer be legal tender from midnight tonight.” Added Finance Minister Arun Jaitley, “The goal of this is to clean transactions, [to] clean money.” Who can disagree that demonization is a shock therapy conducted by the government to eradicate black money, counter tax evasion and destroy counterfeit currency. This radical and sudden movement was to stop counterfeiting of the current banknotes allegedly used for funding terrorism, as well as a crackdown on black money in the country and no doubt the effects are widely seen and praised globally. Those not having any account with bank are queuing up to open an account, a step towards financial inclusion. This move has also shown effects on drug market, smuggling, human trafficking, prostitution and other means of corruption. Though the cons are also present, no doubt a shock therapy without institutional transformation will have a limited impact, and lost with time. The Indian reality is that many trades and areas are still cash-based and “cannot be digitized just by willing it.” But there are pros also, which outweighs the cons - hence a thumbs up for this movement.
Now coming to some of social reforms PM Modi has initiated:
Beti-Bachao and Beti-Padao Scheme - There’s a powerful saying, “When you educate a man, you educate a man but when you educate a woman, you educate a generation”. This is because of the benefits of educating girls permeates the entire family and have far-reaching impacts within the entire society. In 2015, the Indian government launched its flagship scheme ‘Beti Bachao, Beti Padhao’ (Save daughters, educate daughters). The scheme aims to battle malnutrition, improve gender ratio and provide education, maternity benefit apart from perking up the efficiency of several welfare schemes. Women upliftment is nearly impossible if issues such as illiteracy, inequality, sexual harassment and female infanticide are not combated in the right manner. Then there was an addition to the scheme in form of the Sukanya Samriddhi Scheme. This scheme was launched to meet the expense of the Girl child’s higher education and marriage.
LPG subsidy reforms – This reform was initially started as a ‘Give-It-Up’ campaign, later the Petroleum and Natural Gas Ministry stopped/cut the LPG subsidy to customers who earn more than Rs. 10 lakh per annum. The amount saved from here was used to give over five lakh new LPG connections to those who used firewood or kerosene stoves for cooking. This reform instilled a wave of positive thoughts for India across the world. This was more of a social reform, with a pertinent economic angle.
Swachh Bharat mission - Sanitation ministry's Swachh Bharat mission got wide public support. Under this mission not the cleaning the locality is counted but the government is also building more toilets and is taking important steps towards waste management and waste segregation. However, the real success will happen only when manual scavenging is totally eradicated.
Other Welfare Schemes:
A slew of insurance schemes namely crop insurance for farmers, Atal Pension Yojana for the unorganized sector, affordable health insurance coverage, and the Jan Aushadhi Yojana for retail sales of generic drugs have also been introduced. Kisan Vikas Patra has been reintroduced. To improve investment scenario in the country, India is also seeking to terminate bilateral investment protection treaty (BITs) signed with 57 countries and sign joint interpretative statements. There should also be mention of UDAY– Under this UDAY scheme, the Power Ministry plans to aid discoms and State governments to raise up to Rs. 1.75 lakh crore through bonds to improve the health of power distribution sector and Aadhaar – Though, Aadhar was introduced during the previous Government but this government saved Aadhaar from turning to a white elephant by passing the Aadhaar Bill.
In response to changing economic realities and multiple crises, investment policy-making is experiencing a paradigm shift. Post the new regime in 2014, there has been a renewed push to improve the investment scenario in the country, which was marred by policy paralysis for several years before. The emphases of all these measures are on bottom-up approach and making the country to move towards cooperative federalism. The participation of States as observed by the Government is an important step towards developed economy.
The new wave of reforms undersigned by many new campaigns as listed above are changing the Indian economy face forever, more so as the behavior among stakeholders are also changing. Systemic or deep rooted social issues and corruption cannot be fixed without big bold reforms, and one should also not expect that the government will solve all these social and economic ills, the people must provide full cooperation in eradicating them. But for sure if these steps are implemented efficiently – the corruption will go on a long vacation & the opportunities for investment in India as a whole & states will definitely take a boost.