As Prime Minister Narendra Modi braces for a second term with a historic mandate, herculean economic challenges await him. Experts expect India to fair better under Modi 2.0.

The new government will consider a clutch of proposals over the next 100 days to complete unfinished goals of fine-tuning reforms such as the bankruptcy code, spurring private investments, reversing a slowdown in consumption, creating jobs and fixing farm policies.

Here’s what to look out for in the first 100 days.

For India

The finance ministry has prepared 100-day agenda for the new government with an aim to push the economy which has slipped to 6.6 per cent in the third quarter of 2018-19. In its poll manifesto, BJP promised to turn India into a $5 trillion economy by 2025 and reiterated its promise to double farm income by 2022.

The government is expected to simplify GST by doing away with the two top rates of 18% and 28%. GST tax slabs could be merged into two main rates from four at present. BJP’s election manifesto talked about simplification of the GST process and lowering time spent for tax compliance to 1 hour per month.

The new government will also try to improve manufacturing and revitalise its Make in India initiative. This would also help the re-elected government give a much-needed boost to job creation.

The policy priority in the second term will be to reignite growth with prudence as secondary priority.

For you and me

The primary expectation of the common man is more cash in hand after taxes. Thus, the government is expected to bring changes that favour citizens. The new government may consider more relief for taxpayers in the main budget.

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In 2017, the Modi government formed a task force to draft a new direct tax legislation or code to replace the existing 50-year-old Income Tax Act.

The task force was scheduled to submit its report by February 28, 2019. However, the deadline was extended by three months to May 31. So, it is likely that the Modi government may replace the existing Income Tax Act.

The re-elected government is also expected to continue its clean money campaign with various tweaks in tax rules and laws to plug leakages and put a check on cash transactions.

The Modi government had taken steps to make India ‘cash-lite’. This trend is also expected to continue. The Reserve Bank of India has already announced that it will soon come up with a new set of customer-protection measures aimed at improving user confidence in electronic payment channels.

The Interim budget 2019’s tax changes are also here to stay. The main among these include: full income tax rebate for those earning up to Rs 5 lakh per annum, increase in standard deduction from salary to Rs 50,000, removal of tax on notional rent on second house and hike in TDS threshold limit.

For students
The re-elected Modi government has plans to unveil a new national education policy, a drive to fill 5 lakh vacant faculty positions in higher education, and add of 10 Institutions of Eminence (IoE) to the existing sanctioned strength of 20. IoEs are expected to break into the international top 100 club of academic institutions.

The HRD Ministry will also unveil a five-year vision document covering themes such as access, quality, excellence, governance systems, research and innovation, employability, accreditation processes, use of technology for education, internationalisation and financing the higher education.

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For health
Over the first three months of a second term earned with a resounding margin, the Narendra Modi government may surprise patients with more affordable medicines as well as cheap blood tests.

The ministry is said to be planning to launch pathology labs at more than 5,000 Jan Aushadhi outlets across India, besides capping traders’ profit margins. A scheme to encourage domestic production of raw material for medicines is also in the wings, to reduce India’s dependence on imports.

For China
India has prepared a strategy to gain market access in China for its farm and pharmaceutical exports and attract foreign companies looking to shift out their manufacturing bases from there in the wake of the trade war between the US and China.

The commerce department’s strategy paper, aimed at reducing India’s trade deficit with its neighbour, proposes a detailed sector-wise strategy for import substitution in electronics, telecom, electrical equipment and pharmaceuticals, which form the bulk of the country’s purchases from China. India’s trade deficit with China stood at a record $63.04 billion in FY18.

For the factory workers
A proper cover for migrant labourers and factory workers is a top priority, and the effort will be to cover 100 million workers in the Employees’ State Insurance Scheme by 2022.

For software
In February, the Union Cabinet, chaired by Prime Minister Modi, approved the National Policy on Software Products – 2019. In its first 100 days, the new government is expected to press ahead on this, with the idea to increase India’s share of the global software product market ten-fold by 2025.

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The new NDA government is expected to push ahead with an agenda to put Indian software products and product start-ups on the national map.



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