“The India story is still intact but its economy has so many ingrained structural problems that it cannot be fixed overnight, and policies will take time to come to fruition”
– Phillip Uglow, chief economist, MNI indicators
After the landside victory of NDA, expectations from the new government were very high. Modi has raised a lot of hopes and made fiery speeches. There were many promises made but very few have been worked upon. We can witness lack of investment by industrialists, as there haven’t been any bold reforms after new government came into power. There hasn’t been sharp fall in red tape or reduction in corruption. Safety and harassment of women is still an issue. Maoist attack continues. No major steps to bring black money as government had promised. Many people believe there is lack of transparency. GDP growth has been below the expectation from the government. IIP has grown just by 2.8% and India’s exports growth fell from 15.2% to 6.7%. Though inflation is tamed down, but credit goes to the global plunge in oil price. There hasn’t been any resolution on tax issues for many foreign companies.
In upper house or the Rajya Sabha, BJP is having only 43 out of 245 seats so making any big bang reform becomes impossible without support from opposition. There have been election in many states and BJP has been victorious in all of them, but there is still time for BJP to form a majority in upper house as these are nominated seats with tenure. Moreover, parliament faced many issues like minister Sadhvi Niranjan Jyoti’s comment, book praising Nathuram Godse, Ghar wapsi program and resulted in adjourned parliament sessions.
On the other had, despite of many criticisms MODI government has done many commendable deeds. Government had taken firm stand at WTO in Bali for the Indian farmer. Government has continued all the welfare schemes initiated by the Manmohan Singh government. Due to high expectations investors gained the best as sensex skyrocketed. There has been much liberalisation in FDI in sectors like railways, real estate, and insurance and further talks are going on. There has been many major initiatives taken by new government as follow:
• Digital India
• Make in India
• Clean Ganga Campaign
• Swachh Bharat abhiyan
• Jan dhan Yojana
• Planning commission to Niti Aayog
• Skill development initiative
Digital India campaign has got many admiration and support from MNCs. It’s Rs. 1.13L Cr initiative taken by government to empower electronics and IT sectors. Multinational giants like Facebook, Microsoft and Google have backed it. Mckinsey has claimed that digital India campaign can increase GDP growth by $550bn to $1tr by 2025. Make in India campaign was started by PM to make India self reliant by producing in India across 25 sectors. A consortium of IITians has been formed for Clean Ganga campaign and budget of Rs. 2037Cr has been assigned for the whole integrated project. Swachh Bharat Abhiyan has got many criticism, celebrities and common people are lauding it by participating in the same. It is having a noble purpose to stop open defecation, build and maintain toilets, and solid waste management. Government is going to spend over Rs. 62,000Cr for the same. Clean Ganga campaign and Swachh Bharat Abhiyan have been included as CSR activities under Companies Act, 2013. Jan Dhan Yojana has been quite a success and it achieved its original (75mn accounts) and revised (100mn accounts) target as well in advance before its deadline of 26th January 2015.Government has created Niti Ayog replacing planning commission of India on 1st January 2015.
There have been many diplomatic tie-ups made by the new government. PM had given clear signals by inviting SAARC nations during his swearing ceremony. During BRICS summit in Brazil, idea for new development bank was given. In Japan, various agreements related to defence, roads-highways, healthcare, and cooperation in clean energy were signed. In Australia, PM had signed agreements for cooperation in cyber and maritime security and fighting terror. Government has managed to invite US president Barak Obama as chief guest for the republic day. These bilateral meetings provide higher probability of investment to boost economic growth. Moreover improved rating by Standard and Poor suggests growing confidence in Indian economy. Government has taken a firm stand while handling tussles on the borders. It has changed the work culture of bureaucrats and made them punctual. Besides these, Government passed insurance ordinance in parliament raising foreign equity cap from 26% to 49%. Government also passed an urgent executive order to ease land-acquisition rules in sectors like power, housing and defence sectors. It has also announced promising coal auction policy. A lot of radical decisions are expected from the forthcoming budget of new government. Government is trying to bring goods and service tax (GST).
In defence, parliamentary affair minister M Venjaiyah Naidu has said, “ Decades of congress rule left India in avery bad shapes. To expect miraculous change in just six month would be unjust.” In 2015, Labor, land, insurance bill and tax reforms will be in watch list. It will take time for substantial reforms to take place and work effectively because of implementation and effectiveness lag in process. In short term duration government has shown promising sign on steady growth and future development.[/sociallocker]