With the sound and dust of the Bihar Assembly elections yet to subside, the Narendra Modi government has quickly moved ahead and announced what has been termed as ‘big bang’ reforms that most analysts and foreign investors have been clamouring for. This is ostensibly to deliver on PM’s commitment to poverty elimination, inclusive development and to turn India into a global manufacturing hub. These include a series of economic reforms and a number of measures to improve the ease of doing business in the country. This action is a step to integrate the Indian economy with the rest of the World to attract investments and technology and generate employment for enhancement of income of the people. Here is all you wanted to know in 7 points about the economic reforms unleashed by the govt today:
1. The Government has brought in FDI related Reforms and liberalisation touching upon 15 major Sectors of the Economy. These include:
i. Limited Liability Partnerships, downstream investment and approval conditions.
ii. Investment by companies owned and controlled by Non-Resident Indians (NRIs)
iii. Establishment and transfer of ownership and control of Indian companies
iv. Agriculture and Animal Husbandry
vi. Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities
viii. Broadcasting Sector
ix. Civil Aviation
x. Increase of sectoral cap
xi. Construction development sector
xii. Cash and Carry Wholesale Trading / Wholesale Trading (including sourcing from MSEs)
xiii. Single Brand Retail Trading and Duty free shops
xiv. Banking-Private Sector; and
xv. Manufacturing Sector
2. The Crux of these reforms is to further ease, rationalise and simplify the process of foreign investments in the country and to put more and more FDI proposals on automatic route instead of Government route where time and energy of the investors is wasted.
3. Opening up the manufacturing sector for wholesale, retail and E-Commerce so that the Industries are motivated to Make In India and sell it to the customers here instead of importing from other countries.
4. The reforms enhance the limit of Foreign Investment Promotion Board (FIPB) from current Rs 3,000 crore to Rs 5,000 crore.
5. Corrections made to remove constraints faced by limited liability partnerships as well as NRI owned Companies who are motivated to invest in India.
6. New proposals to enhance sectoral Caps so that foreign investors don’t have to face fragmented ownership issues and get motivated to deploy their resources and technology with full force.
7. Along with these sectoral reforms, DIPP has also been advised to consolidate all FDI related instructions contained in various notifications & press notes and prepare a booklet so that the investors don’t have to refer to several documents of different timeframes. This exercise is intended, on the one hand, to further open up the sectors for more foreign investments in the country and, on the other, also make it easy to invest in India.