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Indian Economy During NDA Government
The Government of India remains confident, but some concrete and bold steps in these direction are needed to bring the economy back on the path of higher growth.
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NDA Government has completed its seven years last month. A lot of reforms have been implemented during this period with focus on economic wellbeing of the country. Although Corona has shaken the entire world for two consecutive years, India's economy is being counted among the fastest growing economies in the world.
Moving forward from the "Garibi Hatao" slogan, the focus of the current government is towards creating a New India. So, the focus of all ongoing reforms is toward making a country self-reliant in almost every sphere. Rating agencies are improving India's rating. According to UNCTAD's World Investment Report, India is one of the world's favourite countries for investment. Even India's foreign exchange reserves stands at US$ 590, arguably the highest after independence. India's ranking in the Business World Competitiveness Rankings continues to improve and according to the World Bank's Ease of Doing Business 2020 survey, India has already jumped 14 places to the 63rd position in the world, the highest in the last seven years. India is now ranked at 35th position out of 160 countries in the 'Logistics Performance Index' (LPI). Whereas it was at number 54 in the year 2014. The stock market is also creating history, the Sensex, which earlier stood at 15-16 thousand, has already crossed 50 thousand mark. The activities of the manufacturing sector of the country have increased significantly. The Purchasing Managers Index (PMI) had hit an 8-year high of 58 in October 2020. This is PMI's strongest growth since February 2012.
At the time of framing economic policy of the Country, policy makers have kept in mind all the constitutional and social mandates. No segment of the society has been ignored be it poor, middle class, youth or financial reform of major institutions or infrastructure.
On social security front, through the introduction of one nation one ration scheme, now an eligible person will be able to take ration from the public distribution system shop in any part of the country. Atal Pension Yojana (APY) is another major social security scheme of the current government with the objective of providing old age income security to the workers of the unorganized sector. The government has also started a pension scheme for small businessmen, under which, about 3 crore retail traders of the country are being given pension of 3,000 rupees every month after the age of 60 years. Ayushman Bharat (PM-JAY) is the world's largest healthcare scheme, under which cashless health insurance of up to 5 lac per family per year is being provided to about 10 crore BPL families (about 50 crore people). Under the ‘Pradhan Mantri Awas Yojana’, 1.95 crore new houses are proposed to be constructed by the year 2022. Approximately 50 lakh houses have already been delivered under this project.
To improve quality of rural women and to create a smokeless rural India, about 8 crore LPG connections have been provided free of cost to the eligible families across India, under 'Ujjwala Yojana'.
Due to lack of bank account, crores of poor families across India were outside the mainstream economy and were deprived of government’s benefits or their benefit were being diverted illegally. Under the ‘Pradhan Mantri Jan Dhan Yojana’, about 44 crore people have opened their bank accounts. This has helped these people to get direct benefit from various government schemes. For government also it is easy to offer direct help to crores of farmers, women, migrants and streamline the social welfare process which helped in reducing corruption at a large scale. The number of beneficiaries under the Direct Benefit Transfer during pandemic is greater than the whole population of United States of America. This example signifies the scale of advantage this scheme has brought for the socially and economically deprived section of our country.
The government reforms are not only focussed towards social security but also designed to improve lives and livelihood of the countrymen. Under this theme, government has started the ‘Kisan Samman Nidhi Yojana’ for, under which Rs 6,000 per year is being given to each eligible farmer for fertilizers, seeds, and modern infrastructure. A special 'Agriculture Infrastructure Fund' of Rs 1 lakh crore has been created for this purpose. To offer better quality of life and to enable the rural population socially and economically, electricity has been made available in 100 percent villages under the ‘Saubhagya Yojana’.
Some programs launched by NDA Government i.e. “Make in India” and “Skill India” with formulas 'Vocal for Local' have brought revolutionary change in business environment of the country which eventually led growth of FDI in India. Foreign Direct Investment grew by about near 50 percent from April 2014 to March 2019 in India. In 2016, to promote innovation and start-ups. Start-up India scheme has been launched with the intention of creating a strong ecosystem of innovation in the country. Rs 1,000 crore Startup India Seed Fund has been created to support this program. This scheme has worked as confidence building mechanism for youths. A good number of youth have benefitted from this program and adopted self-employment thus generating employment opportunities rather than seeking jobs. Mudra Loan Scheme has been started to financially support self-employment and start-ups of new business models. Under this scheme, youth can take loan up to rupee ten lakh very easily. This scheme has created about 3.5 crore new entrepreneurs, who have been given loans up to Rs 30 crore. To enable the poorest of the poor to lead a life of self-respect, a loan of up to ten thousand is being given to street vendors under “PM Sva-Nidhi Yojana”. As of March 2013, there was an education loan of Rs 48382 crore in the account of the banking sector, by October 2020, the total education loan figure has increased to Rs 1 lakh crore. This shows the urge to learn in today's youth and enabling intention of the current government.
The banking system is the lifeline of any economy. Taking the boldest economic step, the government has merged 10 public sector banks into big banks. This merger will provide Indian banks with the advantage of capital adequacy and sizable size that most foreign banks have. The government has taken several drastic steps including e Recognition, Reservation, Recapitalization, Reform and the Insolvency and Bankruptcy Code to reduce the NPAs in the banking sector. Sudden outbreak of covid 19 pandemic may have definitely increased the NPAs for some time. However, with the help of such reform measures, India could be the third largest banking hub in the world by the year 2040.
Major leap has been taken through introduction of a single domestic indirect tax for the entire country in the form of GST. The step of demonetisation, with objective to attack black money, is one of the major steps of NDA Government. This step has also inspired people to opt for cashless and digital payments. Introduction of BHIM, UPI has revolutionized the payment system in the country and the credit for this change has to be given to the current government.
To improve accessibility and connect unconnected geographies, government launched “UDAN Yojana” in October 2016. This program has made air travel more affordable for the common man and connected remote areas across the country. Government is also working towards strengthening road and rail connectivity through various projects. Like the lines of fate, roads are on the way of progress, for the first time in the country 6 to 12 lane, 37 km of national highways are being built every day. The government is setting up industrial corridors to spur planned and sector specific growth in the country. Launch of more than 100 satellites by ISRO and 5G Network during the tenure of current government will boost the communication process in the country.
The country has now moved from basic infrastructure to ‘multi-modal connectivity infrastructure’. A lot has changed between 2014 and 2021, replacing the red tape method, PM Modi personally monitors and reviews the progress of the programs.
We know that every coin has two side. No government is blessed with magic wand to do miracles, still the central government under Narendra Modi has several feathers in its cap. However, Modi Government also needs to pay special attention in certain direction. Despite all efforts towards promoting self-employment, the unemployment level has touched new heights. Every month more than one million people in the country join the queue to get employment. According to the Centre for Monitoring Indian Economy (CMIE), unemployment has broken a record of 4 decades due to the Corona pandemic. Inflation is another area where this government needs to work. Though most of the basic necessity items have been largely inflation free, edible oil and fuel prices are increasing rapidly, thus putting pressure on the kitchen as well as economy. Falling Gross Domestic Product (GDP) is one of the major economic challenges for the policy makers, which has been badly damaged by the pandemic. The last and the most concerning aspect is continuous slowdown in consumption. Sales of many products are declining, and people are scared to spend. Though the Government of India remains confident, but some concrete and bold steps in these direction are needed to bring the economy back on the path of higher growth.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.