Reforms were long waited considering that the drivers of India’s growth story since 1991 – Dr.Manmohan Singh and P. Chidambaram are in the center. But due to one reason or other, in the last 3-4 years they failed to produce any magic to revive the economy. However, things are going to change; UPA government has finally started a series of bold measures to boost the India’s Economy.
The latest among the reforms are FDI in Multi-brand Retail and FDI in Domestic Aviation Sector.
Indian Economy had been facing a slow down since 2008 partly due to external factors (like Eurozone crisis) and partly due to internal factors ( like opposition from coalition partners preventing many positive measures to revive economy.)
But now, UPA-2 government has started showing guts to implement some crucial reform oriented measures.
After taking back Finance ministry from Pranab Mukerjee, Sri. P. Chidambaram had drafted the revival plan for Indian Economy. The steps followed include:
- Review of GAAR( General Anti Avoidance Rule) and its delay in implementation, which was welcomed by foreign investors.
- Review of Retrospective Taxation. (Will not be implemented in its present form).
- The recent hike in Diesel Price by Rs.5 ( It was long back when diesel price was hiked, and government is spending crores to subsidize diesel which is now fueling many luxury cars) and implementation of quota on subsidized LPG cylinders. This move is a real bold measure, as common man is directly touched by it, but for India to grow Government has to do this. Government’s borrowings to finance the subsidies will be decreased by a large extend because of this move.
- And now, FDI in retail and FDI in Aviation: FDI was essential in these both sectors, and many countries like China had already adopted this. This move is expected to help common people by getting items at cheaper cost. And this step can bring down inflation rate as it takes out middle men in the supply chain.
It can be seen that opposition is opposing for the sake of opposing in many of these reform issues. Even with Coal-gate issue, where many opposition ruled states also favored non-auction, rather than conducting an open discussion in the Parliament, the opposition is just playing cards to turn public sentiment against the ruling party. With media too not playing its social role and only interested to sensationalize things now a days , it is necessary that the public should think from a wider angle. What steps do the media/ opposition have with them to revive the economy which was growing at 9% and now dropped to 5.5%?
Don’t misunderstand that the author is pro-government, but most of the steps taken so far are necessary considering the present economic condition of India. We were lacking in many sectors, particularly the manufacturing sector, where growth was in 0.1 – 2% range! The latest reforms were the result of well thought approach, crisis-driven one too, which will be appreciated by many economists and the market itself in the coming days. Congrats to the government for implementing it!