2 years of Modi govt: Indian economy on better footing now, say experts

The National Democratic Alliance (NDA) government under Prime Minister Narendra Modi has completed its two years regime on 26 May 2016. Some of the economic experts are of the view that the central government’s focus should be on effective implementation of the announced programmes and schemes.

Dr S P Sharma, Economy expert, said that India’s economy has been doing better. He said the economy is on better footing now than it was under the last government led by the Congress party and headed by former PM Manmohan Singh.

“We are improving in GDP numbers as this financial year, GDP rose to 7.3% as compared to 6.3% in the last fiscal year when Congress was in power. Even inflation is almost half of what it was at a couple of years ago. WPI (Wholesale Price Index) is in the negative trajectory and CPI (Consumer Price Index) is around 5% which is far below than what it was two years ago,” said Dr Sharma.

Besides, Foreign-direct Investment (FDI) and foreign exchange reserves have reached to a better place as well. In the last 2013-14 fiscal year, FDI was at 24 billion dollars whereas in a span of 9 months this year FDI is at 30 billion dollars, said the expert.

Moreover, Sensex this year reached above 25,000 as compared to 23,900 in FY 2013-14. He mentioned, “In terms of power sector, India will become power surplus country in the coming time. Most importantly, the industry growth was 5% in FY13-14 but now it is 9% which is far better.”

According to World Bank, India was placed at 144^th rank in ease of doing business in FY 2013-14 and now it stands at 130^th rank. Besides, in global competitiveness we are at 55 rank this year as compared to 71 rank in FY 2013-14.

Dr Sharma opined, “The government has done well in the infrastructure sector as well. Per day road development has majorly improved as it was 2 to 3 kms in FY 13-14 and now it is 18 to 19 kms.”

“The government’s programmes such as Skill India, Digital India, and Make in India etc. are for longer period of time. Although there is no immediate effect, these programmes will yield good results in the long-run,” he added.

Dr Sharma rates the current government 5 out of 10 for its work in the last two years. “Asia’s third largest economy is moving in the right direction. Lot of reforms and policies have been announced however the government should focus on its ‘effective implementation’ at grassroots level which will be a key to its success. The schemes and policies are good however proper roadmap is required.”

Speaking about Goods and Services Tax Bill (GST), the economy expert said the bill must be implemented. “I think the Bill will get implemented in April 2017 as the government is keen to get it through. The GST will subsume all indirect taxes such as excise duty and service tax into a single standard rate which will reduce the anomalies in the transaction system,” said Dr Sharma.

In addition, the expert suggested that, the government, in a bid to be successful, should focus more on agriculture sector and bring in agricultural reforms to control food inflation followed by reforms in the manufacturing sector. Besides, much emphasis should be given to four factors of production such as labour, capital, land and entrepreneurship, he added.

Echoing similar sentiments, Akash Jindal, another economy expert said, “The government’s performance has been above average although not up to people’s expectation. I would score the government 6 out of 10.”

Jindal mentioned that there is a lot of scope of improvement for economy. “People wanted short term solutions such as immediate jobs and immediate reduction in inflation. The Government’s flagship programmes such as Skill India, Digital India, and Jan Dhan Yojna etc will bring in positive results in long term but it should have come up with short term solutions as well.”

The completion of two years of Modi led government has got good numbers in macroeconomic fundamentals but it needs more time for its programmes to bear fruit. It’s time for the government to bring in short term plans with effective implementation for ‘Acche Din’.