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From jobs to farm and infra, target set for $5 trillion economy
Hindustan Times  |  July 22, 2019

HT Correspondent New Delhi

Targets have been set to make India a $5 trillion economy and to provide basic necessities like drinking water and power to all Indian households as Prime Minister Narendra Modi’s government completed 50 days in office on July 19.

 

Modi took oath on May 30 after his Bharatiya Janata Party-led National Democratic Alliance returned to power with a bigger majority.

 

In its first meeting after being sworn in on May 30, the Union cabinet reached out to the farmers and traders with a new pension scheme and extension of the Pradhan Mantri Kisan Samman Nidhi under which 120 million small and marginal farmers with less than 2 hectares of landholding will get up to Rs. 6,000 annually as minimum income support. The pension scheme, Pradhan Mantri Karam Yogi Mandhan Yojana, will cover 30 million retail traders and small shopkeepers with an annual turnover of less than Rs. 1.5 crore and all farmers.

 

In its first budget presented on July 5, the government announced measures to boost private investment and prioritised its own spending, especially in rural and urban infrastructure, to further drive growth. The government widened the scope of its housing programme (Pradhan Mantri Awas Yojana) to construct 19.5 million houses for the poor in three years. By 2022 when India will complete its 75 years of independence, it wants to ensure every rural family has electricity and clean cooking gas connections.

 

As the government needs money to fund its schemes, it is keen on improving the country’s ease of doing business ranking. The government has increased the threshold of companies in 25% corporate tax bracket to annual turnover of up to Rs. 400 crore from the earlier Rs. 250 crore. The expansion of the threshold means 99.3% of all companies would be covered in this tax bracket. It will also set up a Credit Guarantee Enhancement Corporation to deepen markets for long-term bonds in the infrastructure sector.

 

During its first term, the government could roll out landmark reforms such as Goods and Services Tax and set up regulators for the first time in the real estate market. With a bigger majority in Lok Sabha and better tally in Rajya Sabha, the government will expedite streamlining multiple labour laws into a set of four codes.

 

The government also wants to get the Indian Medical Council (Amendment) Bill cleared to ensure transparency, accountability, and quality in the governance of medical education. It also renewed its efforts to push the Muslim Women (Protection of Rights on Marriage) Bill to criminalise the practice of instant divorce among a section of Muslims.

 

Making India a $5 trillion economy is perhaps the government’s biggest challenge. To spur investment and create new employment opportunities, the government has set up two cabinet committees. It has also announced setting up of a high-powered committee on structural reforms in the agriculture sector. The panel also includes some chief ministers and will examine legislative changes required for reforms.

 

The government plans to invest Rs. 100 lakh crore over the next five years for infrastructure development. It seeks public-private participation to address the requirement of Rs. 50 lakh crore needed to boost the railway infrastructure. Apart from new rail lines and better connectivity, schemes such as Pradhan Mantri Gram Sadak Yojana, industrial corridors, dedicated freight corridors, etc are aimed at boosting connectivity.

 

The Centre has announced that it will examine options of opening up Foreign Direct Investment in media and animation.

 

The vast rural market, which also has the potential to drive growth, is another focus area for the government. One woman in every Self-Help Group (SHG) will be allowed to take up to Rs 1 lakh loan under the Mudra scheme. Every women SHG member having a verified Jan Dhan account can get an overdraft facility of Rs 5,000. These measures are aimed to pump in more money into rural economy and to help farming families seek alternative sources of income. At the same time, the Centre would promote zero budget farming, form 10,000 new Farmer Producer Organisations to help bring farmers together and ensure that the benefits of agricultural reforms reach them faster and more effectively.

 

The government has earmarked Rs 70,000 crore for Public Sector Banks recapitalisation as a part of its measures to strengthen financial institutions. Strategic disinvestment of Central Public Sector Enterprises including Air India is being planned as a source of funds for other social welfare projects.

 

The government has started a crackdown on separatists in Jammu and Kashmir and tightened the law on black money after coming under an Opposition attack after Vijay Mallya, Nirav Modi and Mehul Choksi were able to flee the country without paying back bank loans.

 

On the foreign policy front, India has stuck to its stand of not restarting dialogue with Pakistan saying terror and talks cannot go together. With countries like the US, India has been able to engage productively.

 

The first 50-day period of the new government was also a busy time for Indian diplomacy. Modi invited Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation leaders and chair of the Shanghai Cooperation Organisation to his oath-taking ceremony. He visited the Maldives in June and received the highest civilian award there. Modi also visited Sri Lanka after the terror attacks there. At home, he welcomed US Secretary of State, Mike Pompeo. At the G-20 Summit, Modi met all top world leaders in June.