To arrive at any conclusion related to PM Narendra Modi’s economic policies, one has to rewind to the 2012-13 period, when rupee was at a marked low on account of taper tantrum and India had been dubbed as one of the ‘fragile five’ economies of the world. Policy paralysis had punctured investor confidence and Indian businesses, both big and small, stared into impending distress and despair.

Multiple reforms and measures were taken by the Modi Government from 2014 onward which resulted in lower debt to GDP ratios and increase in import cover. As macro fundamentals improved, India was able to attract higher foreign investments FDI and FPI. This growth helped in consistent inflow of funds and helped India overcome global headwinds including unstable commodity prices.

• During the F.Y. 2019-20 (April 2019 to February, 2020), the total FDI inflow grew by 23%, i.e. USD 69.91 billion in comparison to USD 56.87 billion reported during the same period of previous year. It is the highest ever for a particular financial year.

From the low growth-high inflation syndrome which had rendered India vulnerable to external shocks to achieving high growth-low inflation, the Indian economy has been able to reinvigorate on the back of structural reforms across sectors. Consistent focus on fiscal consolidation has brought back India as an economy to reckon with.

• India’s share in world GDP has increased from 6.64% (2014) to 7.74% (2018).

Source: https://www.incometaxindia.gov.in/Documents/Direct%20Tax%20Data/IT-Department-Time-Series-Data-FY-2000-01-to-2018-19.pdf

Source: World Bank

Investors and entrepreneurs alike faced two crucial impediments in India i.e. prolonged periods of time consumed in compliance and exorbitantly high cost of doing business due to lack of transparency and corruption in the system. Both these roadblocks were swiftly addressed by putting in place a single-window clearance mechanism, time-bound approvals and using technology to minimise human intervention and thereby reduce middlemen and liaison fee. These steps manifested in increasing ease of doing business in the country which revived the investor sentiment. Time is a critical resource, and as businesses experienced higher efficiency and reduced hurdles, India became an attractive destination for both, foreign and domestic investors.

Some of the crucial bills passed during six years of Narendra Modi Government that have succeeded in creating positive economic spillovers include:

1. Goods and Services Tax
2. Insolvency and Bankruptcy Code
3. Benami Transactions (Prohibition) (Amendment)
4. Companies (Amendment) Bill
5. Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill
6. Undisclosed Foreign Income and Assets (Imposition of Tax) Bill
7. Employee’s Compensation (Amendment)

India’s economic landscape went under a complete makeover with a concerted push for digital transactions which has ushered in high level transparency in the workings of social and government bodies. By adopting a bottom-up approach to economically empower the vulnerable by providing social security along with basic utilities like electricity, toilets, gas cylinder, PM Kisan Samman Nidhi Yojana, Ayushman Bharat, and increase their contribution to India’s growth through access to capital via MUDRA, Narendra Modi’s policies are aligned to Antyodaya. Moreover, by making high-level changes through amendments in archaic laws and introducing new legislations, arrangements were made so that these policy implementations were able to achieve social and secondary objectives. For example, Ujjwala aims to provide clean cooking fuel and also provide women at home spare time for exploring other economic activities or meeting family commitments.

The Modi Government has treated farmers as an integral part of Indian economy and opened an ocean of possibilities for them to explore and strengthen their economic position. Farmers are now permitted to sell their goods at a location of their choice and discover the best price for their produce. This brings Indian farmers at par with other sectors.

While Modi 1.0 successfully tackled the growing crony capitalism and augmented investor confidence by getting rid of frequent scams and misappropriation in subsidy distribution, Modi 2.0 has focussed on creating long-term agents of growth and employment through asset creation and providing an enabling environment.

• National Infra Pipeline worth more than Rs 100 lakh crore over the next 5 years
• National Textile Mission to allow the textile industry to explore new opportunities
• Permitting Indian companies to list their securities in permissible jurisdictions
• Opening all sectors for private investment and limiting presence of public enterprises to strategic sectors

With razor sharp focus to achieve USD 5 trillion economy, India has embarked on a journey that will culminate into several local economies across the country contributing through Vocal for Local mission, across manufacturing and services. The Aatmanirbhar Bharat will be an outcome of combined efforts of citizens and government through collaboration, communication and cooperation. India has immense opportunities to serve the world and emerge as a participant in the global markets as opposed to the conventional role of being the largest market for global players.