As India eagerly awaits the last budget announcement before the upcoming elections, it is crucial to reflect on Prime Minister Narendra Modi's economic record. Over the past few years, his government has introduced several key reforms and initiatives aimed at boosting economic growth and development. However, it is also important to acknowledge the areas where his policies may have fallen short. Here, we provide a factbox summarizing the hits and misses of Modi's economic agenda.
Hits:
1. Goods and Services Tax (GST): Perhaps the most significant economic reform undertaken by the Modi government, the implementation of the GST in 2017 aimed to streamline India's complex tax structure and unify the domestic market. While the initial rollout faced some challenges, the GST has led to simplification, increased tax compliance, and widened the tax base, boosting government revenues and contributing to greater economic integration.
2. Attracting Foreign Direct Investment (FDI): Modi launched the 'Make in India' campaign to attract foreign investment and encourage domestic manufacturing. The initiative has resulted in substantial FDI inflows, making India one of the world's top destinations for foreign investors. This has not only created employment opportunities but also stimulated economic growth.
3. Financial Inclusion: Modi's ambitious Jan Dhan Yojana aimed to provide every household in India with a bank account. This initiative has been successful in bringing millions of unbanked citizens into the realm of formal banking. It has not only facilitated direct benefit transfers but also encouraged savings and financial planning among lower-income households.
4. Digital Revolution: The government's emphasis on digitalization and the promotion of digital payment systems has led to a significant increase in digital transactions. Initiatives like the Unified Payments Interface (UPI) and the BHIM app have facilitated faster, secure, and convenient payments, reducing reliance on cash and promoting a digital economy.
Misses:
1. Job Creation: Despite efforts to boost employment through initiatives such as 'Make in India' and Skill India, job creation has been a major challenge. While the economy has grown, it has not been able to generate enough jobs to accommodate the growing workforce. This has resulted in high levels of unemployment and underemployment, particularly among the youth.
2. Agrarian Distress: The agricultural sector, which employs a significant portion of the Indian population, has been grappling with numerous challenges, including declining farm incomes, lack of access to credit, and poor infrastructure. Despite various schemes and initiatives, such as the Pradhan Mantri Fasal Bima Yojana, addressing agrarian distress remains a critical challenge.
3. Tax Reforms: While the GST has been a positive step toward simplifying India's tax system, the implementation process faced several challenges, leading to confusion and compliance issues for businesses. Frequent revisions in tax rates and procedural changes added to the burden on taxpayers and created uncertainty.
4. Export Growth: Despite efforts to promote export-oriented industries, India's export growth has been sluggish. Factors such as bureaucratic hurdles, inadequate infrastructure, and a complex regulatory environment have hindered the country's ability to compete in global markets. This has adversely affected the balance of trade and the overall economic growth.
As we await the announcements of the last budget, it is important to critically assess the hits and misses of Modi's economic agenda. The upcoming budget is expected to address some of these challenges and set forth a roadmap for the country's economic future. It remains to be seen how the government navigates these complexities and delivers policies that will foster sustainable and inclusive growth for India.
