Prime Minister Narendra Modi has asserted that the Indian economy is on the path of expansion. In the backdrop of the slowing down of GDP growth-rate, the Prime Minister reiterated that his government is committed to expand the Indian economy to 5 trillion dollars in the next five years.
Prime Minister in an unequivocal reiteration of the economic policy of the government, asserted that a number of curative steps have been taken in the past which will bear results in the coming years. Addressing ASSOCHAM (Associated Chambers of Indian Industry), which has completed 100 years, Mr. Modi made a forceful intervention to dispel the notion that Indian economy has been contracting.
Indeed, much has been said about the GDP growth contracting in the past few quarters. This is also in the backdrop of the global economic slowdown. There is a trade war going on between the United States and China which is also undeniably impacting the Indian economy.
There is no denying the fact that Prime Minister Modi inherited an economy which was severely hit by bad loans.
The public sector banking institutions struggled with much higher Non Performing Assets (NPAs) on their books. With banking institutions struggling to lend to the industries, it became evident that the space for economic expansion would be squeezed. The Prime Minister rightly said that his government’s top priority was to restore the public sector banking institutions to good health. Mr. Modi said that more than half a dozen public sector banks have come out of this under the supervision of the Reserve Bank of India.
It is true that the NDA government in the past 5 years has initiated the process of amalgamation of the public sector banks so that they become competitive and large enough to compete with the best in the sector.
At the ASSOCHAM meeting, Prime Minister spoke at length about the risk to the economy because of the collapse of the banking sector’s lending positions on account of bad loans. It is true that a number of corporate entities defaulted on loan repayments which in turn crippled the fiscal space of the economy.
The successful resolution of the Essar steel, which brought to conclusion the insolvency process will give much needed relief to the banking institutions. The Prime Minister asserted that steps taken by his government are now bearing results. He said, “The economy was headed towards disaster when we took over in 2014. We have stabilized the economy and brought in essential discipline as well. The government has addressed the long pending demands of the industry”.
Prime minister stated that government has listened to the Indian industry and the reduction in the corporate tax is proof of this. Prime Minister Modi observed that government has taken a number of steps to bring transparency in the economy. The implementation of the goods and services tax (GST) is also a step in the direction of ensuring transparency in taxation.
Mr. Modi mentioned that the India’s ranking in the ease of doing business in 2014 was 142 out of 190 countries. That India has attained the 63rd rank surely speaks volumes about the efforts of the government to bring transparency as well as expeditious approval to investment proposals. He said, steps have been taken for labour reforms which includes codification of labour laws that was desired by the industry.
The further amendments to the Insolvency and Bankruptcy Code (IBC) is an affirmation that government is protecting the interest s of the banks and industries, which in turn would give impetus to the economy.
Prime Minister Modi reiterated that the target to expand the economy to a $ 5 trillion economy is much thought-out and is within reach. Prime Minister has demonstrated in the past that the targets set by his government could be achieved. The ‘Swachch Bharat’ (Clean India) campaign is a true testimony to the target-oriented approach of the government.
Script: Manish Anand, Sr. Spl. Correspondent, the New Indian Express