Modi’s 30-reform report card: Only 9 done, 6 not started, 15 partially done; here’s full list

By: | Updated: November 3, 2018 4:17 PM

In the last 4.5 years, of the 30 major reforms, the government has been able to complete nine of them, while six have not been started and 15 have been partially achieved

In the last 4.5 years, of the 30 major reforms, the government has been able to complete nine of them, while six have not been started and 15 have been partially achievedIn the last 4.5 years, of the 30 major reforms, the government has been able to complete nine of them, while six have not been started and 15 have been partially achieved

The Narendra Modi government is at the finish line of its five-year term. It was the government elected with an overwhelming majority in 2014 on the promise of development and growth. Prime Minister Narendra Modi, in fact, was often witnessed talking about reforms, new age technologies, and the need to keep pace with changing business dynamics.

In the last 4.5 years, of the 30 major reforms, the government has been able to complete nine of them, while six have not been started and 15 have been partially achieved, Centre for Strategic and International Studies (CSIS) scorecard showed.

CSIS is a monthly tracker of reforms undertaken by the Indian government. The scorecard is a list of thirty big reforms that the Modi government confronted when it took office and the status of each. The latest update shows that at the end of 4.5 years, the government has not been able to start six reforms.

Here the complete list of 30 reforms

1. Allow foreign investment in more construction projects

Yes. The Modi government removed almost all restrictions on FDI in construction, including minimum project size, and reduced the lock-in period for capital to three years.

2. Allow foreign lawyers to practice in India

No. Despite regulations governing Special Economic Zones (SEZs) to allow the practice of law in SEZs, the reform is yet to take-off.

3. Allow more than 50% foreign investment in defense

Yes. The government approved 100% FDI route in defense but later rejected the first and only proposal to establish 100%  foreign-owned defense manufacturer in India.

4. Allow more than 50% foreign investment in direct retail e-commerce

Partially. The government said that FDI is not allowed in business-to-consumer e-commerce unless items are all being sold under a single brand and meet local-content requirements.

5. Allow more than 50% foreign investment in Insurance

Partially. The 2016 consolidated FDI Policy allowed up to 49% investment in insurance through the automatic route.

 6. Allow more than 50% foreign investment in Indian Railways

Yes. The government opened most of the railways sector to 100% FDI.

7. Conduct transparent auctions of telecom spectrum

Yes. India has conducted multiple “free and fair” telecom auctions with no complaints from private-sector participants.

8. Create a unified national tax on goods and services

Yes. The Goods and Services Tax was implemented nationwide on July 1, creating India’s first-ever national market and replacing most state and federal taxes.

9. Deregulate diesel pricing

Yes. The government deregulated diesel pricing in October 2014.

10. Deregulate fertilizer pricing

No. The government will continue with price regulation regime under the four-year urea regime.

11. Deregulate kerosene pricing

No. The government has not deregulated kerosene pricing. It had, in 2016, asked oil marketing companies to increase each month by only 25 paise per litre per month.

12. Deregulate natural gas pricing

Partially. Cabinet announced a new energy policy that switches to a revenue-sharing model (from a profit-sharing model), and allows substantial pricing freedom.

13. End retrospective taxation of cross-border investments

Partially. The government announced the formation of a committee to look into and approve all retrospective tax demands and offered a one-time dispute resolution opportunity.

14. Ensure that business owners can receive a permit in 10 days or less

No. As per Ease of Doing Business 2017 report, it takes 26 days to start a business in India. However, there was some progress.

15. Establish processes for more thoughtful financial regulations

Partially. The government partially began seeking comments on a Task Force Report proposing the structure of a new Financial Redress Agency (FRA). The FRA will act as a consumer regulator of
the financial services industry.

16. Extend the expiration date of industrial licenses

Yes. The government increased the maximum validity of an industrial license from two years to seven years.

17. Fully open the coal mining sector to private/foreign investment

Yes. The Parliament approved the Coal Mines (Special Provisions) Act, opening the sector to private—including foreign—investment.

18. Institute a mandatory 30-day “Notice and Comment” period for proposed regulation

Partially. The Ministry of Law & Justice has asked all ministries, urging them to comply with a 30-day notice & comment period and other rules. Implementation has been inconsistent.

19. Make it easier for states to use eminent domain to purchase land

Partially. The new national land acquisition law, although it passed in the Lok Sabha, failed in the Rajya Sabha, and the government is no longer making this issue a legislative priority.

20. Make it easier to start a business by offering one-stop shopping for clearances

No. The World Bank’s Ease of Doing Business Report 2017 notes that it requires 12.9 procedures to start a business in India, compared to the South Asia regional average of 8.1.

21. Make it quicker and easier for companies to go through bankruptcy

Yes. The first case under the new Insolvency Code was started in the Maharashtra High Court in 2017.

22. Raise the ceiling on foreign institutional investment in Indian companies

No. The government raised the investment limit for foreign portfolio investors in public sector enterprises from 49% from 24% and allowed FPIs up to 100% of each tranche of securities released by asset reconstruction companies.

23. Reduce restrictions on foreign investment in multi-brand retail

Partially. FDI in multi-brand retail was opened in September 2012. However, the rules governing foreign investment—minimum investment size, sourcing, and location—have so far precluded investment in this sector.

24. Reduce restrictions on foreign investment in single-brand retail

Partially. FDI up to 100% via the government approval route, but requires that 30% of goods sold in the first 5 years be manufactured in India. This period is tolled 3 years for ‘cutting edge’ technology.

25. Relax government controls over corporate downsizing

Partially. In March, the Ministry of Labour relaxed rules for fixed-term (contract) employees, allowing such labour in all sectors.

26. Remove government mandated minimum prices for agricultural goods

No. The government has not done anything in this regard.

27. Remove sectoral investment limits

Yes. In 2015, the government removed the last 20 products that were reserved for small-scale industries.

28. Stop forcing banks to lend to “priority sectors”

Partially. In May, the RBI slightly relaxed Priority Sector Lending rules for Priority (Urban) Cooperative Banks.

29. Use Direct Benefit Transfer to deliver cash subsidies

Partially. The government has introduced a dedicated portal tracking its efforts to transition to DBT.

30. Use Direct Benefit Transfer to deliver goods subsidies

Partially. The government has introduced a dedicated portal tracking its efforts to transition to DBT.

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