Three months into office, PM Modi promised to remove “financial untouchability” through the Pradhan Mantri Jan Dhan Yojana aimed at providing banking access to all.
A month later, cheered on by some of India’s top billionaires, Modi unveiled the Make in India initiative to turn India into a manufacturing powerhouse, vowing to remove bureaucratic sloth and make the country more investor friendly.
The two schemes have since come to define the NDA government’s reform model – push investment but also financially empower the poor to make growth more inclusive.
Launched on September 25, 2014, the Make in India campaign is as much an invitation to domestic and foreign companies as a promise to pull the country from the bottom of the World Bank’s ‘ease of doing business’ index. India now ranks 130, up from 142 in 2014.
The Jan Dhan scheme, arguably the world’s largest financial inclusion plan, has enabled 210 million people, most of them from the lower-income strata, to open bank accounts yielding a combined deposit base of Rs 36,000 crore.
A string of programmes under the Jan Suraksha umbrella, which include Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana are also targeted at the aam aadmi. The Mudra scheme, which provides micro loans for small businesses, is gaining ground. More than `1,11,388 crore has been given to 290 million small businesses, says an SBI internal study.
Power shortage, land acquisition, ambiguous tax laws to byzantine labour rules and other hurdles have kept large-scale private investors away from what should be a massive and attractive market.
The Digital India programme is an ambitious plan to move everything – education, public services to bureaucracy -- online. In January, Modi launched Start-up India, announcing a Rs 10,000-crore fund to attract private capital for start-ups.
This month, Parliament passed a bankruptcy code to enable failed businesses to wind up faster, aid quicker dispute resolution and hasten debt recovery by banks snowed under loans worth more than Rs 4 lakh crore.
“In terms of importance, this is the second-most important piece of legislation, next only to the goods and services tax bill. This has a huge impact and though they may not be visible immediately, the bankruptcy code will have long-term implications,” Shaktikanta Das, economic affairs secretary, told HT.
The government has also unveiled labour reforms to make rules simpler and employee-friendly. It also seeks to do away with arbitrary inspections at factories, reduce paperwork and make India more investor-friendly.
The Real Estate (Regulation and Development) Act, hanging fire since 2009, has finally been voted into law. It will make builders accountable with strong penal measures overseen by a much-needed regulator. India has also moved a step closer to a “monetary policy framework” that will empower a six-member monetary policy committee chaired by the RBI governor to take decisions on interest rates.
“We are moving in the right direction…what we need now is implementation of these schemes,” said Rajiv Kumar, a senior fellow at the Centre for Policy Research.
In November, the government eased foreign direct investment norms for 15 sectors, including defence, broadcasting, construction and retail trade.