The BJP Government is on the verge of completing a year and has now stabilized. Major economic initiatives and actions are emerging for a high growth oriented economy.
Monetary Policy:The latest dialogue between the Government and the Reserve Bank of India to work as a team to bring out monetary, fiscal and economic consolidation is a welcome step. The Interest Rate - Inflation Balancing will bring out positive result over
International Financial Services Centre: The Reserve Bank of India, Securities and Exchange Board of India, and the governments have come out with major initiatives. The first International Financial Services Centre is starting at Ahmadabad, Gujarat. The initiative to permit the facility like Special Economic Zones (SEZs) to Banks, Insurance companies Mutual Funds, Alternative Investment Funds, Stock Exchanges, brokerages and other financial services have the potential of major financial reforms to strengthen international investment and international trade.
Global Depository Receipts (GDRs): The Government has permitted conversion of International investment in Indian companies into GDR for listed, unlisted, as well as private companies. This will strengthen investment sentiments significantly as soon as certain international jurisdiction implement such global depository receipts.
Coal/2G Auction: The transparent manner in which scarce resources have been auctioned and ` 300,000 crores are being collected have glorified the stand of Hon'ble Comptroller and Auditor General and the Supreme Court.
Actions under pipeline: There are many other initiatives which are at various important stages of consideration/ implementation such as Goods and Services Tax, Comprehensive Amendment to Companies Act, 2013, electronic approval of all major government departments through a single portal and of course the proposal of the government to withdraw the requirements of approvals, subject to compliance of certain guidelines and parameters in respect of most of the government approvals. The major steps to simplify Income tax Act are awaited for last several months.
Apprehensions: A cross section of intellectuals, academicians, bankers, economists, businessmen and professionals are still apprehensive about the success of government initiatives. A major change on the ground indicating economic growth, new business opportunities, availability of adequate financial resources in terms of debt and equity and large employment generation are still to take real shape. The rising expectations of Indian as well as international investors are yet to be met.
Sectors need special care: The Real Estate sector, Infrastructure sector, steel, cement and several other consumer goods are still to witness growth momentum and Realty Sector has seen negative growth in certain quarters. The commodity prices Internationally as well as in India are under tremendous pressure.
Better Sentiments: Various actions and initiatives of the government have achieved brightening of sentiments and positivity in the mind set.
Tax Laws and Complex Regulations: It is important for the government to consider strategic relaxation in direct taxes. Fiscal policies need to be fine-tuned for creation, pooling and channelizing of capital to fuel in growth momentum in the economic activity. The inbound and outbound international investment need to grow with a more relaxed and less regulated atmosphere. Lengthy and complex laws need to be replaced by short and crisp legislations by removing unnecessary procedures and approvals.
Corruption needs to be eradicated strategically through systematic changes and E-governance.