On May 26, the Modi government at the Centre is completing its nine years. Several reforms have been implemented during this period with a focus on the economic well-being of the country. Although the Corona, Russia-Ukraine war and the global economic recession have shaken the whole world, still India’s economy is counted among the moving economies of the world, overall, the economic growth in the last nine years has been mixed.
Aadhaar has become India’s most trusted ‘identity currency’ today and fintech is increasingly being used extensively for direct benefit transfers. PM Awas Yojana for housing, Saubhagya for electricity, Ujjwala for LPG connections, Swachh Bharat Abhiyan for toilets, and Ayushman Bharat for medical insurance are helping the needy.
Due to not having a bank account, there were crores of poor families of the country who were outside the mainstream economy. About 44 crore people have opened their accounts under Pradhan Mantri Jan Dhan Yojana, today the government is providing direct help to crores of farmers, women and migrants in their accounts. Tax reform is one of the top priorities of the government. GST is the biggest tax reform in India which was founded on the concept of “One Nation, One Market, One Tax”. As a result, India has a strong revenue base, which has crossed Rs 1.50 lakh crore for the second time since the introduction of GST. National Single Window System launched in September 2021, PM Gati Shakti and National Logistics Policy implemented in October 2021. Initiatives like the Production Linked Incentive (PLI) scheme have been instrumental in attracting investments in 14 key sectors.
In these nine years, the government has merged 10 public sector banks into big banks. The merger is providing Indian banks with the capital adequacy and size advantage that most foreign banks have. Major steps like Recapitalization and Reform and Insolvency and Bankruptcy Code have been taken for the banking sector. According to the survey of the international agency PWC, India can be the third largest banking hub in the world by the year 2040. Like the lines of fate, roads are the path of progress, for the first time in the country, 37 km of national highways are being constructed every day with 6 to 12 lanes. India received a record foreign investment of $84 billion last year.
India’s global ranking in the Business World Competitiveness Rankings is continuously improving. There has been a lot of growth in the activities of the country’s manufacturing sector. The Purchasing Managers’ Index (PMI) had reached a 13-year high of 62 in April 2023. This is the strongest PMI growth since June 2010. According to the World Bank’s Ease of Doing Business 2020 survey, India has already jumped 14 places to rank 63rd in the world, which is its highest position in the last nine years. India is now ranked 38th among 139 countries in the ‘Logistics Performance Index’ (LPI). Where it was at number 54 in the year 2014. India moves up from 146th in 2018 to 68th in 2021 in ‘Trade Facilitation Ranking’. India has been ranked 37th in the Global Competitiveness Report Index published by the Geneva-based World Economic Forum, where it was ranked 60th in 2014. The Center for Economics and Business Research has predicted that India will become a $10 trillion economy by 2035.
Merchandise exports exceeded a record $400 billion in the last financial year. While India’s contribution to global trade is less than 2 per cent, that means the Make in India campaign is not able to provide expected support to the economy. Despite all the efforts to promote self-employment, the level of unemployment has broken the record of 4 decades. The Make in India program was primarily focused on defence production, although India remains the world’s largest arms importer between 2018–2022. Even compared to Bangladesh, our cost is 40 per cent to 50 per cent more. Vietnam has, over the past decade, more than doubled the manufacturing sector as a factor in GDP. Our education is not skill based which the private sector needs the most. About 54 per cent of Indians are currently unemployed as the growth of the manufacturing sector has stagnated, and these youth lack specialized skills to participate in the service sector. Despite the Skill India Mission, today youths with good degrees from universities are applying for police constables.
The challenges on the front of inflation are no less for the government. The prices of many food items have been on the rise for some time. Wholesale inflation is at its worst in 30 years. India’s foreign exchange reserves are depleting. The value of rupee is falling continuously and as against Rs 65 in 2014 it is Rs 83 today. “Revary culture” dominates all policies, it is also the country’s misfortune that even after 75 years of independence, the country’s economic policies focus more on attracting Indian voters and not keeping long term economic benefits in mind. Half of India’s population will be below 30 years of age by the end of this year. The demographic dividend requires long-term investments that address high unemployment among women, minorities and youth.
India is on the cusp of a big change. In these turbulent times of global uncertainties, the whole world is looking towards India with great hope. India can’t take a break. We’ve come a long way, but we’re still on the road of growth.
The author is Associate Professor, Atal School of Management (ABVSME), Jawaharlal Nehru University (JNU), New Delhi
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