“The Indian economy is growing strongly and remains a bright spot in the global landscape,” remarked by the IMF mission chief for India, Paul Cashin. But few questions arise here which requires answer or at least attention through discussion. How long it will remain bright spot? When this bright spot will convert into a powerful economy? What effort and care is required at policy front and implementation strategy?
India needs to do its SWOC analysis for further strengthen its global position, work on weaknesses, grab the opportunity and tackle the emerging global challenges. To do these India must have consolidated coherent pragmatic policy with clear blue print for implementation frame. On this path India needs to resolve decades old pending issues at its earliest i.e. L3 T Reform: Land, Labor, Law & Order and Tax Reform. Land Acquisition, Rehabilitation and Resettlement Act, 2013 followed by The Right To Fair Compensation and Transparency in Land Acquisition, Rehabilitation And Resettlement (Second Amendment) Bill, 2015 is an indication of Government awareness of the Land issue but still no concrete implementable outcome is there on the ground. No Project can start and progress without clear policy on Land acquisition. We all claim about demographic dividend (65% of population is below 35yrs old i.e. huge work force) but lack of clear labor law as needed in present global scenario, provision for need based training, reforms in formal education and skill centers, care during the job specially in unorganized sectors, provision for fair compensations etc. are few issues which deprive the country from that dividend. Despite low wages, India is not a global manufacturing hub, even while being one of the fastest growing service sectors in the world. Law and Order is a mega challenge for the country and is a biggest hurdle of India’s growth story. The issue of Law and Order ranges from corruption in the system to crime on the street. Unless India ranks in the list of Ease of Doing Business in double digit (130th rank in year 2017) and less than 25 rank in Corruption Perception Index (76th rank in year 2016 as per The Berlin-based corruption watchdog Transparency International) the dream to join the league of developed nations will not get fulfilled. Government is active on the Tax front and Goods and Service Tax (GST) is now within reality but the implementation will be a challenge and faster redressal of dispute will decide the success of it. Direct Tax Code (DTC) is a mega issue and government has to refine and redefine to make it streamlined where base of the tax should increase with decrease in the tax rate.
The Central Government is aware of the issues but requisite effort is missing. The way Indirect Tax Reform (GST) has been taken as a task to make it success similarly other reforms are also equally important. Center and States should come together to make India’s sustainable growth in double digit possible because rest of the world has already offered platform for the same. It is possible with pure economics and no politics.
Dr. Kumar Bijoy Economic Analyst in University of Delhi