India Budget 2019-20: A slew of 'big-bang' economic reforms that could please foreign investors are likely to be pursued by Modi 2.0 showcasing the full weight of the humongous 303 mandate that it achieved in 2019.
- By Rakesh Nangia and Sandeep Jhunjhunwala
India Budget 2019: Jai Jawan, Jai Kisan, Jai Vigyan and Jai Anusandhan is the slogan of new India. A clutch of proposals to complete unfinished goals from its last term are being considered by the Government to graduate to the next level of financial inclusion. A plan to kick-start private investments and kindle demand is getting drawn up, as the incoming administration gets ready to present a full budget this week. From creating a separate ministry for water to combating severe water crisis and campaigning ‘Jal Shakti Abhiyan’ to envisioning a 5 trillion-dollar economy, the Government is taking bolder and more impactful steps to achieve socio-economic development.
Continuity in the government implies continuity of policies, which bodes well for all stakeholders in the entire ecosystem. Tough policy actions and reforms taken during the last term should continue to deliver benefits and get augmented by new initiatives, which would definitely stimulate the economy further. Domestic policy stability and an uncertain global environment should encourage foreign investors to positively reappraise their India positions.
Several crucial reforms, policy measures and landmark legislations were introduced by the Government in the previous term – Benami Transactions (Prohibition) Amendment Act, Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, Real Estate (Regulation and Development) Act, Insolvency and Bankruptcy Code, Banning of Unregulated Deposit Schemes Ordinance, Fugitive Economic Offenders Act, to name a few. A slew of ‘big-bang’ economic reforms that could please foreign investors are likely to be pursued by Modi 2.0 showcasing the full weight of the humongous 303 mandate that it achieved in 2019.
Close to 40 Government bills have remained pending in the Rajya Sabha upon the dissolution of the 16th Lok Sabha and will come up for discussion as the new government takes charge of the business. The Parliament recently cleared the Special Economic Zones (Amendment) Bill, 2019 paving the way for trusts to set up units in such areas. As a part of the Government’s efforts to offer universal social security, a new scheme has been approved which assures minimum monthly pension of ₹3000 per month to small shopkeepers, retail traders and the self-employed people after attaining the age of 60 years. All small shopkeepers and self-employed persons as well as the retail traders with GST turnover below INR 1.5 crore and aged between 18-40 years, can enrol themselves for this scheme, through more than 3.25 lakh common service centres across the country. The Government will make a matching contribution in the subscribers’ account. The Union Cabinet has also approved the New Delhi International Arbitration Centre (NDIAC) Bill, 2019 which would facilitate India becoming a hub for institutional arbitration. The Ministry of Electronics and Information Technology has finalised the much-anticipated Personal Data Protection Bill, which will now be placed for Cabinet approval before the Bill goes to the Parliament. Under its Personal Data Protection Bill 2018, India is enforcing data localisation to ensure protection, security and better control or transmission of data outside the country. A new industrial policy to make India a manufacturing hub and a national retail trade policy is also on the anvil. Buddhiman Bharat for a smarter India and an Uber model for agriculture are among the initiatives that the Government is hoping to introduce in its second term.
A new Labour Bill/ Code is likely to be introduced in the coming session of the Parliament. The Government is planning new labour legislation that would merge 44 labour laws under 4 categories – (i) Wages (ii) Social security (iii) Occupation Safety Health and Working Conditions and (iv) Industrial Relations. The Companies (Second Amendment) Ordinance, 2019 is in force and the Government is considering the inclusion of points with respect to the appointment of auditors and reopening of books of accounts in the ordinance.
The National Institution for Transforming India (NITI Aayog), the Government’s think-tank which was set up as a replacement for the Planning Commission by the previous Modi Government, is once again ready for change, with its Strategy for New India @ 75. What the economy really needs now is a manifestation of political will to carry through with the many well-considered, thought-through policy prescriptions.
- Rakesh Nangia is Managing Partner and Sandeep Jhunjhunwala is Director at Nangia Advisors (Andersen Global). Views are the authors’ own.