Prime Minister Narendra Modi, is back in power as the “Chowkidaar” (“torch-bearer”) of the country. The BJP won a whooping 302 seats on its own, among the 353 seats bagged by the NDA coalition in the 2019 Lok Sabha elections.
Modi 1.0: 5-year recap
The economy of India underwent some major changes since Modi’s takeover in 2014. Introducing Aadhaar, Jan Dhan Yojana, law against benami properties were some of his initial steps.
Demonetisation in 2016 illegalized 86% of India’s currency, which eventually backfired as it slowed down every sector of production and the digital economy of the country.
The compound annual growth rate of GDP from financial year 2015 to 2019 is an estimated 6.02%. The Direct Tax to GDP ratio is 12% and the GDP collection for financial year 2019 was found to be 11,77,369 crore.
90% of the rural road connectivity has been achieved and 1.5 crore homes have built in the past five years. MSP (Minimum Selling Price) for 22 crops has been increased to 1.5 times cost of production.
The credit to MSMEs grew to Rs 2,52,000 crore by 2018 from Rs. 1,04,000 crore in 2013. The annual health scheme, Ayushman Bharat provided a funding of 1 lakh rupees to around 107.4 million poor families.
The Ayushman Bharat scheme provided health insurance to over 500 million Indians. MUDRA was one of the government’s major steps to boost young entrepreneurs by funding grants upto ten lakh.
NDA’s 100-day action plan should focus on measures to prime the economy and kick start consumption, says Elara Capital. The main budget must also focus on reducing tax rates which can in turn increase consumption and reduce corporate tax to increase investment.
The re-elected Modi government is bringing up a new national education policy, to fill 5 lakh vacant faculty positions in higher educational institutions and to add ten more ‘Institutes of Eminence‘ to the existing 20.
The MEIS (Merchandise Export from India Scheme) is likely to be replaced with another WTO-compatible scheme in the 100 day agenda. MEIS is an export incentive scheme valued at Rs. 32,000 crore,which recently faced opposition as it failed to abide by the rules of the World Trade Organisation.
The Trump-led trade should not affect the strategic partnership with the United States.
A tit-for-tat strategy is being planned as per the proposed retaliatory tariff worth $235 million dollars on 29 American goods, as a response to the extra US duty on the its aluminium and steel.
MSME (Micro, small and medium Enterprises): Accidental insurance of Rs 10 lakh to all traders registered under GST, alongside a credit target of Rs 1 lakh crore by 2024.
The goal is to make India the third largest economy from the current seventh position. The government is aiming to double the current exports and will be announcing a new industrial policy. The centre is aiming to lower tax rates and improve compliance.
Former Reserve Bank of India governor, Raghuram Rajan emphasized on creating a better entrepreneurial environment in India and the funding of Special Economic Zones (SEZs) in the country.
In its election manifesto, the BJP promised to ease GDP related processes if voted back to power.
One of the key promise made by the NDA is the doubling of farmer income by 2022.
An investment of Rs.25 lakh crore in the agri-rural sector and short term farm loans up to Rs 1 lakh at an interest rate of 1% are the areas of focus.
The plan is to set up 1,50,000 health centers by 2022.
Pricing policy for usage of certain medical devices is to be announced.
The Narendra Modi government plans to make hospitals into an “industry” under the Ayushman Bharat scheme and plans to provide land and funding to private hospitals.
Infrastructure and Energy
A total capital investment of Rs. 100 lakh crore is being projected.
A promise to double the length of National Highways by 2022.
Aiming to double the number of functional airports by 2022.
The goal is to achieve 175GW of renewable energy capacity and to implement 10% blending of ethanol in petrol.
To sum it all up, looks like the future of India is in safe hands!
Sources:EEPC India, NITI
Image Source:Economic Times