Finance Minister Nirmala Sitharaman in the fourth tranche of measures of Rs 20 lakh crore special economic package, announced the policy reforms to fast-track investments, in Prime Minister Narendra Modi’s quest to make a nation self-reliant economic powerhouse. The government will identify new champion sectors to pump in more investments, which can then drive the country’s economic growth. In the last couple of months, the government formed an empowered group of secretaries (EGoS), which is now working on identifying project development areas, and forming project development cells in various ministries. These project development cells will prepare investable projects and coordinate with investors and the central or state governments.
FM Sitharaman informed that the ranking of states on investment attractiveness has also been worked out which will make them compete for new investments. FM further added that the incentive schemes will be provided for the promotion of new champion sectors such as Solar PV manufacturing, advanced cell battery storage, etc and will be given priority. Over the last 6 years, India’s ranking improved significantly in the Ease of Doing Business rankings globally. India climbed 14 places to reach 63rd rank in 2019 from its previous year’s ranking.
Fast Forward Liberalisation
The reforms announced today by the Finance Minister are like “liberalisation in fast forward mode,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, praising the move. “FM’s structural reforms announcements today take the policy of going ‘vocal about local’ forward,” he added.
Today’s FM Nirmala Sitharaman press conference was more about structural and policy reforms to attract more investments, raise production and generate employment in crucial sectors, after addressing various issues that needed immediate attention and relief measures. In her first set of measures, the Finance Minister addressed the issues related to liquidity in MSMEs and non-banking financial institutions. While on the second day, the government dealt with the issues faced by migrant labourers, workers and street vendors, to provide for work and food for the poor. However, in the third tranche of measures, FM Sitharaman focused on the agriculture and allied sectors, liberalising these from state control.
“For an ‘Atmanirbhar Bharat’ and ‘Make in India’ such steps are crucial and we want to make sure that efforts which have been taken clearly give us the confidence that ‘Make in India’, which was launched years back, as an initiative to change the mindset of the people, to bring in new ways of doing business, to make sure that India becomes attractive on its strength, are all being received very well,” FM Sitharaman said.
The steps announced today are positive for investment which will accrue hopefully over time, CARE Ratings said. “It is more a continuation of the economic reforms being announced at different points of time and does not address issues of specific sectors impacted by the covid (like hotels, airlines etc) which may come in the next round,” it added.