Economic growth: Going Forward
The year 2019 saw presentation of two budgets where in the Government came out with decisive policies in the prevailing situation of economic and trade uncertainty. The changes made include the corporate tax cut and amendments made to the IBC to streamline the insolvency process.
The Union Budget 2019 also gave a boost to electric vehicles with a GST cut from 12% to % and also introduced an additional income tax benefit of Rs. 1.5 lac on loans for the purchase of electric vehicles. During the interim budget, the government announced a Rs. 6000 annual income support for farmers called the PM KISAN. Recognising the importance of MSMEs a 2% interest subvention was also announced along with a partial credit guarantee to PSBs for purchasing pooled assets of NBFCs.
The Finance Ministry in September 2019, setup a task force to build a national brownfield and Greenfield infrastructure pipeline worth Rs. 100 lac crore. The Union Cabinet in the same month also approved for 100% FDI under automatic route for contract manufacturing and coal mining. In 2019, India climbed to the 63rd spot among 190 countries in the World Bank’s ease of doing index.
While the government has taken several steps, more work remains to be done to shift India to fastback growth. Reforms are required to include improvements in land & labour laws, focusing on a more open trade regime while removing hurdles in accessing capital. A reforms in taxes, a stable regulatory regime and greater digital connectivity can help guide the economy out of slump.