{"id":155,"date":"2019-03-18T12:01:12","date_gmt":"2019-03-18T12:01:12","guid":{"rendered":"http:\/\/www.kamalsandesh.org\/blogs\/?p=155"},"modified":"2019-04-03T11:46:09","modified_gmt":"2019-04-03T11:46:09","slug":"agenda-2019-part-8-the-fourteen-iconic-reforms-of-prime-minister-narendra-modis-government","status":"publish","type":"post","link":"https:\/\/kamalsandesh.org\/blogs\/agenda-2019-part-8-the-fourteen-iconic-reforms-of-prime-minister-narendra-modis-government\/","title":{"rendered":"Agenda 2019 \u2013 Part \u2013 8 : The Fourteen Iconic Reforms of Prime Minister Narendra Modi\u2019s Government"},"content":{"rendered":"

Arun Jaitley<\/strong><\/p>\n

F<\/strong>ive year is not a long period in the life of a nation. It can, however, be a turning point in its direction for progress.\u00a0 1991 was an important watershed in Indian history.\u00a0 Prime Minister P.V. Narasimha Rao was confronted with an economic crisis.\u00a0 The economic situation compelled reforms.\u00a0 Many in the Congress Party lacked the conviction to support reforms.\u00a0 After the initial two years from 1991-1993, the Congress Party became apologetic about the reforms.\u00a0 That is probably the reason why the efforts to erase the memory of Shri P.V. Narasimha Rao from Congress Party\u2019s contemporary history is still \u2018work in progress\u2019.<\/p>\n

The National Front Government partly rationalised direct taxes.\u00a0 The first NDA Government took key decisions with regard to infrastructure creation and prudent fiscal management.\u00a0 Bold policies on telecom and National Highways made significant impacts on the economy.\u00a0 The UPA Governments between 2004-2014, got stuck into slogans rather than economic expansion.\u00a0 They created \u2018Rights\u2019 without a major increase in resources being provided to implement those rights.\u00a0 Subsequently, the Government got marred in corruption and wasted its tenure in a cover up exercise.\u00a0 Prime Minister Modi\u2019s Government was elected when India was already a part of the \u2018Fragile Five\u2019 and the world was predicting that India\u2019s \u2018I\u2019 will be knocked off from the \u2018BRICS\u2019.\u00a0 The Government had no options.\u00a0\u00a0\u00a0 It was committed to reforms.\u00a0 \u2018Reform or Perish\u2019 that was the challenge before the Indian economy.\u00a0 Therefore, the Government systematically and consistently introduced several reforms spread over a five year period which will go down in India\u2019s economic history as the \u2018Second Generation\u2019 of reforms that were much needed.\u00a0 I discuss herein some of the significant steps that the Government took:<\/p>\n

    \n
  1. Taxation reforms and entire black-money steps<\/strong><\/li>\n<\/ol>\n

    India was substantially a tax non-compliant society.\u00a0 Taxation Departments of the Government were a source of harassment which dissuaded people from coming into the tax net.\u00a0 Our tax rates were abnormally high.\u00a0 The interface between the assessing officers, businessmen and inspectors needed to be substantially cut down.\u00a0 The last five years will be considered momentous in this journey.\u00a0 No taxes have been increased.\u00a0 In fact, after sixty-seven years of increase, tax rates have moved downwards.\u00a0 In a bold step spread over a five year period, the income upto rupees five lakh has been exempted from income-tax. Even deductions available to the taxpayers have been increased to encourage and incentivise savings.\u00a0 The Goods and Services Tax has enforced one tax across the country, eliminated barriers and made inspectors disappear.\u00a0 Both income-tax and GST returns are filed on the net and assessment are done on the net.\u00a0 No interface, no corruption.\u00a0 Queries are raised on the net and responses are given on the net.\u00a0 The number of assesses filing returns with reduced tax rates in income-tax has risen close to double in the five year period.\u00a0 The GST will increase the assessee base in the first twenty-one months of its implementation by almost eighty percent.\u00a0 The ideal tax policy of simplification, no interface, lower rates and higher collections, has been implemented.<\/p>\n

      \n
    1. The anti-black money measures<\/strong><\/li>\n<\/ol>\n

      From the legislation of black-money law, through the laws dealing with the confiscation of property of fugitives and extinguishing their civil rights, significant taxation measures to curb black-money have been taken by the Government.\u00a0 The double taxation prohibition treaties with Mauritius, Cyprus and Singapore have been re-written.\u00a0 International agreements have been entered into for real time exchange of information relating to assets held by Indians in their jurisdiction.<\/p>\n

        \n
      1. The Insolvency and Bankruptcy Code<\/strong><\/li>\n<\/ol>\n

        Indiscriminate lending by Public Sector Banks during the UPA Government had created large NPAs.\u00a0 The banking system was under stress.\u00a0 It was being unabled to support growth.\u00a0 Existing schemes and systems were not working.\u00a0 The Insolvency and Bankruptcy Code changed the debtor-creditor relationship.\u00a0 Defaulting managements are removed from management and debtor companies are going in for resolutions with either new promoters taking over or by sale of assets.\u00a0 Banks have finally started recovering their bad debts.\u00a0 No one can cheat the banks and get away.<\/p>\n

          \n
        1. Aadhaar<\/strong><\/li>\n<\/ol>\n

          The implementation of the Aadhaar had given a unique identity number to every Indian.\u00a0 It is a historic step towards using technology and digitization of governance.\u00a0 The result is that without any pilferage or middlemen, the beneficiaries of all Government programmes belonging to the Central Government, the State Government or even the local bodies can now get their benefits in bank account directly.\u00a0 In this area we are ahead of any other country in the world.<\/p>\n

            \n
          1. Demonetisation<\/strong><\/li>\n<\/ol>\n

            Demonetization has proved to be a significant step towards formalisation of the Indian economy.\u00a0 It compelled people to deposit their high currency cash into the banking system, account for the deposits by paying taxes or otherwise.\u00a0 It brought a behavioural change in how India spends its money.\u00a0 The real test of the demonetisation is \u2018has it led to higher tax collections and higher digital transactions?\u2019\u00a0 The unequivocal answer is \u2018Yes\u2019.<\/p>\n

              \n
            1. Inflation<\/strong><\/li>\n<\/ol>\n

              The average inflation of UPA-2 was about 10.4 percent.\u00a0 The average inflation during the NDA has been less than 4.5 percent.\u00a0 In fact, it has been much lesser in the last three years.\u00a0 Today the CPI inflation is below 2.5 percent.<\/p>\n

                \n
              1. No discretions<\/strong><\/li>\n<\/ol>\n

                The NDA eliminated all discretions which Governments, bureaucrats and politicians had.\u00a0 There is no power in any individual or group of individuals to grant favours, largesse or contracts to individuals.\u00a0 Systems have been established and all contracts can only be awarded through a market mechanism.<\/p>\n

                  \n
                1. Cooperative federalism<\/strong><\/li>\n<\/ol>\n

                  The Fourteenth Finance Commission recommended 42 percent as the share of the States in devolution of the taxes collected by the Centre.\u00a0 It was a significant increase by 10 percent of what the Thirteenth Finance Commission had recommended.\u00a0 The Central Government immediately agreed.\u00a0 The States are today fiscally much stronger.\u00a0 In the GST Council, the States have a two-third vote and the Central Government has a one-third vote.<\/p>\n

                    \n
                  1. Agriculture and rural infrastructure<\/strong><\/li>\n<\/ol>\n

                    For the first time, resources have been spent in a major way in rural areas.\u00a0 Rural roads, housing, sanitation, electrification, cooking gas, have all been added to our infrastructure.\u00a0 The farmers now get 50 percent plus their cost through MSP, a subsidised crop insurance scheme, a Rs.75,000 crores income support system by payment of\u00a0 Rs.6000 each to small and marginal farmer annually and Rs.60,000 crores through MNREGA.<\/p>\n

                      \n
                    1. Urban infrastructure<\/strong><\/li>\n<\/ol>\n

                      I will separately give details in my later articles on the creation of urban infrastructure.\u00a0 National Highways, rural roads, port connectivity, number of airports, surplus power, modernisation of Indian Railways, more resources for urban infrastructure, significant resources for rural infrastructure, have been the hallmark of infrastructure improvement in the last five years.<\/p>\n

                        \n
                      1. Ayushman Bharat<\/strong><\/li>\n<\/ol>\n

                        On healthcare, India has seen a major change.\u00a0 Today Ayushman Bharat ensure that 40 percent of the poorest Indians i.e. 50 crore people get a free hospitalisation upto an expenditure of rupees five lakhs a year.\u00a0 In the first few months, nearly sixteen lakh people have been treated till date.\u00a0 Today, with 40 percent support by Ayushman Bharat and 38 percent support by insurance schemes of either Government employers or corporate body, 78 percent of India is health insured.\u00a0 Our target is to make it hundred percent.<\/p>\n

                          \n
                        1. Financial inclusion<\/strong><\/li>\n<\/ol>\n

                          In financial inclusion India has become a global leader.\u00a0 About 35 Crore bank accounts under the Pradhan Mantri Jan Dhan Yojana were opened and every poor household has been connected to the banks.\u00a0 As against 58 percent of the households in 2014, today every willing household is connected to the banking system.\u00a0 Crores of poor people have got an accident and life insurance at normal and negligible cost under the subsidised Government schemes.\u00a0\u00a0 More than 16 Crore Mudra loans have been given to small entrepreneurs for creating avenues of self-employment.\u00a0 The Indian example in financial inclusion is globally quoted as a role model.<\/p>\n

                            \n
                          1. Investment and Make in India<\/strong><\/li>\n<\/ol>\n

                            The stressed banking system that the UPA left behind, had its impact on the investment cycle.\u00a0 From a worrisome situation on the investment front, today fixed capital formation, which is an indication of investment, has moved upto about 14 percent.\u00a0 The Foreign Direct Investment has been liberalised and procedures simplified so as to ensure that India becomes the preferred destination for investment.<\/p>\n

                              \n
                            1. Social impact of Government in social sector investments<\/strong><\/li>\n<\/ol>\n

                              Swachh Bharat, which has connected 99 percent of rural homes to sanitation, became the flagship success story.\u00a0 The education of the girl child, reduction in drop-outs from schools, increased remuneration on those employed in the formal sector such as Asha and Aanganwadi, and other such workers has had a tremendous economic impact.\u00a0 So will be the impact of the 10 percent reservation in jobs and college admission for the economically weaker sections.\u00a0 The minimum wages have been increased by about 45 percent.\u00a0 The gratuity limit has been increased from Rs. 10 lakhs to Rs.20 lakhs.\u00a0 Income eligibility for bonus has been increased from Rs.7,000\/- to Rs.21,000\/-.\u00a0 The impact of middle income groups by implementing the Seventh Pay Commission, the OROP and increasing Government share from 10 percent to 14 percent in the New Pension Scheme has helped the salaried class.\u00a0 The contributory pension scheme for the ten crore informal sector workers is a new first for India.\u00a0 It will make India a pensioned society.<\/p>\n

                              I have outlined above only fourteen game changing decisions of the Government which impacted the economy.\u00a0 The economy expanded at a rate faster than any other country in the world.\u00a0 Our revenues went up and we ensured that the benefit of prosperity and the first right to the exchequer going to the poor is maintained.\u00a0 It will be our endeavour to maintain this direction in future also.<\/p>\n

                               <\/p>\n","protected":false},"excerpt":{"rendered":"

                              Arun Jaitley Five year is not a long period in the life of a nation. It can, however, be a turning point in its direction for progress.\u00a0 1991 was an important watershed in Indian history.\u00a0 Prime Minister P.V. Narasimha Rao was confronted with an economic crisis.\u00a0 The economic situation compelled reforms.\u00a0 Many in the Congress<\/p>\n","protected":false},"author":1,"featured_media":141,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[153,166,165,164],"class_list":["post-155","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-political","tag-agenda-2019","tag-narendra-modis-government","tag-prime-minister","tag-the-fourteen-iconic"],"wps_subtitle":"","_links":{"self":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/155","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/comments?post=155"}],"version-history":[{"count":1,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/155\/revisions"}],"predecessor-version":[{"id":156,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/posts\/155\/revisions\/156"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/media\/141"}],"wp:attachment":[{"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/media?parent=155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/categories?post=155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kamalsandesh.org\/blogs\/wp-json\/wp\/v2\/tags?post=155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}