Government must focus on structural reforms to put the country on the path of faster economic growth, as the “several reforms” implemented so far may not be enough in a fast-changing world, says a new research report.
Referring to the weakness in Chinese economy and the resultant benefits to India, the report by Kotak Institutional Equities also said that a “neighbour’s gloom will get you so far only” and the governments globally will have to finally use fiscal policies and implement structural reforms to fix the current ‘broken’ model.
“We will not go through the usual laundry-list of reforms below but focus on 2-3 ‘crazy’ ones, which the government can focus on a priority basis,” it said, while seeking urgent measures for GST rollout, sale of stakes in the public sector companies for investing the proceeds in healthcare and education, and for higher number of courts and judges.
Kotak Institutional Equities noted that the government should implement GST as soon as possible and if need be, it should agree to the difficult conditions being demanded by the main opposition party.
“We would note that GST is unlikely to be implemented until after the next general elections (2019) if the government fails to pass the GST constitutional amendment bill in the parliament in the next few months,” the report said.
Moreover, the government should look to sell its stakes in government companies and invest as much money as it can in education and healthcare.
“Whatever the world may look like in the next 5-10 years, children/adults without basic skills will struggle to play a meaningful ‘economic’ role in the same,” it added.
The government should expand the number of courts and judges meaningfully and run courts in double shifts after appointing new judges to clear the pendency in the Indian judicial system, as this will help restore the common man’s faith in the laws of the land, instill greater respect of law and institutionalise the concept of ‘rule of law’.
“Although the RBI governor’s ‘one-eyed king’ statement generated a fair degree of controversy in India, we believe it is perhaps time that the government focused on a few critical ‘must-do’ changes to put India on to the path of faster economic growth and social development,” it added.