India’s march continues towards becoming an economic superpower

September 30, 2021 3:45 AM

Furthermore, the latest gross GST revenue collections of Rs 1,12,020 crore in August 2021, which is 30% higher than GST revenues in August 2020, shows a robust trend in terms of higher indirect tax collections indicating rapid economy recovery towards pre-Covid levels.

Since the onset of the pandemic, India has unleashed several bold and transformational reforms that has bolstered its efforts to become a global champion and propelled the country’s economic growth to the next level.Since the onset of the pandemic, India has unleashed several bold and transformational reforms that has bolstered its efforts to become a global champion and propelled the country’s economic growth to the next level.

By BHUPENDER YADAV

The unprecedented COVID-19 pandemic has been thoroughly disruptive in terms of economic activity and loss of human lives across the globe. The pandemic’s economic consequences have hurt every economy in the world, whether developed or developing, with economies and businesses counting the costs. However, at the same time, the crisis has led us towards rethinking about opportunities, leveraging and building back economies, differently and innovatively.

Since the onset of the pandemic, India has unleashed several bold and transformational reforms that has bolstered its efforts to become a global champion and propelled the country’s economic growth to the next level.

One of the most significant reforms undertaken by our government during the Covid-19 pandemic has been consolidation of the 44 labour laws under 4 categories to secure the basic rights of the workers, facilitate employment generation and universalise wage security, social security and safe working conditions. As per the first quarter report of Quarterly Employment Survey (QES) (April to June 2021), the estimated total employment across nine selected sectors — manufacturing, construction, trade, transport, education, health, accommodation and restaurant, IT/ BPO and financial services — reflected a growth rate of 29 percent compared to the sixth Economic Census (2013-14). Further, more than 2.03 crore workers from the unorganised sector have been registered as on date at the government’s “e-SHRAM portal”, a comprehensive National Database for the unorganised workers, that links them to various social security schemes provided by the government. The above evidence-based outcomes bear testimony to our government’s commitment to protect lives and livelihoods of the poor and the vulnerable and catalyse employment generation to stimulate economic growth by reviving demand.

In addition to robust labour laws, production-linked incentive (PLI) schemes were announced to strengthen the domestic manufacturing sector for an Atmanirbhar Bharat, across 13 sectors, with a total commitment of nearly Rs 1.97 lakh crore over 5 years starting FY2021-22. This initiative will help incentivise the domestic manufacturing industry, reduce import dependence and attract both domestic and foreign investments, thereby creating more employment opportunities in this sector.

Further, in terms of monetising operating public infrastructure assets for sustainable infrastructure financing, Rs 6-lakh-crore (worth) National Monetisation Pipeline (NMP) was launched in August 2021. NMP is aimed at tapping private sector investment for creating new infrastructure and employment generation, thereby facilitating higher economic growth and better management of assets through increased private sector participation.

Hence, the NMP scheme will significantly contribute to India’s economic growth through its multiplier effect.

Repeal of the retrospective tax was another bold decision undertaken by the government to end a number of pending tax litigation cases and create future opportunities for greater inflow of foreign investments to promote faster economic growth and employment.

Similarly, amendments have been made to the Insolvency and Bankruptcy Code (IBC) through the introduction of Pre-Pack insolvency for the MSME’s to prevent their liquidation and improve the ease of doing business in the country. Further, in response to timely clearance of banking sector’s stressed assets, our government approved an extension of a guarantee of Rs 30,600 crore to the National Asset Reconstruction Company (NARCL) to facilitate cleaning up banks’ balance sheets and freeing up their growth capital to support economic activity.

The Covid-19 pandemic was a severe blow to the telecom and power sectors and the government promptly addressed their grievances by implementing a set of key structural reforms. The government announced a moratorium on the statutory dues of the telecom sector for four years to improve their cash flows and increased the FDI limit under automatic route from 49% to 100% to bring more robustness and facilitate fresh investment in this sector.

Further, power distribution companies struggling with financial losses were granted relief by our government through approval of an Rs 3.03-lakh-crore scheme for discoms to improve their operational efficiency and financial sustainability. This would make industrial growth more sustainable, attract higher investments and improve our nation’s economic competitiveness.

Furthermore, the latest gross GST revenue collections of Rs 1,12,020 crore in August 2021, which is 30% higher than GST revenues in August 2020, shows a robust trend in terms of higher indirect tax collections indicating rapid economy recovery towards pre-Covid levels.

Hence, in light of the reforms of labour laws, production linked incentive schemes, GST, amendment of tax and insolvency laws and an overall ease in doing business, we may infer that, as envisioned by our Prime Minister Narendra Modi, the above reforms would collectively provide a fillip to India’s economic growth and propel India towards becoming a $5-trillion economy and a global economic powerhouse by 2024-25.

(The writer is Union Cabinet minister for environment, forest & climate change, and labour and employment)

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