One Year of Modi Government: 25 achievements and 25 challenges for the BJP

The Journey So Far: – Jan Dhan Yojana: More than 15 crore bank accounts opened, over 10 crore RuPay debit cards issued, with life cover, pension – Corporate sector adopts prime minister’s ‘Swachch Bharat’ mission with promise of total sanitation by 2019 – Cooking gas now under direct-cash-benefit transfer scheme, with potential saving of $5billion annually in subsidies, plus Diesel prices de-regulated – Foreign equity in rail infrastructure allowed, without limit – Foreign equity cap in defence raised to 49 percent; 74 percent in case of technology transfer – Fast-tracking of defence purchases: 36 Rafale fighters being bought, orders for several long-pending purchases placed – Foreign equity cap in insurance and pension sectors increased to 49 percent – Nod for IPOs/FPOs by banks to raise funds, as long as government equity remains 52 percent or over – Nod for real estate and infrastructure investment trusts, with tax benefits – Cabinet nod for Prime Minister’s 100 Smart Cities Project – $130 billion proposed spending on railways over five years on schemes including high-speed trains – Definitive steps forward in introducing pan-India goods and services regime – Successful conclusion of two rounds of coal block auctions, more lined up – Impasse in mining sector ended with passage of new bill for regulation and development – Successful conclusion of auctions for telecom spectrum for mobile telephony and broadband – Launch of ‘Make-in-India’, ‘Digital India’ and ‘Skill India’ initiatives with focus on defence and electronics, primarily to create jobs – Mudra bank launched with Rs.20,000 crore corpus to extend loans of between Rs.50,000 and Rs.10 lakh to small entrepreneurs – Commencement of divestment programme in public sector companies – Disbanding of various ministerial groups for faster decision-making – Adoption of 14th Finance Commission recommendation on far-reaching changes in sharing of revenues between the Center and the States – Single-window scheme for various clearances to steel, coal and power projects – Price stabilisation fund set up for agri-commodities to check inflation – Warehouse Infrastructure Fund with Rs.5,000 crore corpus to increase shelf-life of farm produce (replace if possible) – Clarity in tax treatment on income of foreign fund whose fund managers are located in India , as also on transfer pricing for resident and non-resident tax payers – Panel set up under law commission chairman on issue of minimum alternate tax The Challenges Ahead:

– Land acquisition remains a sore point with industry and lack of consensus among political parties is not helping in boosting investor mood – Fiscal prudence needs to come back on track, which could lift global sentiments on India with a fiscal deficit of 3 percent of GDP soon – Innovative ways to be found to increase government spending on various schemes – To promote ease of doing business, action awaited to club together some 35 central laws pertaining to labour into just four new legislations – Promised schemes for gold monetisation and gold bonds to be announced, draft norms out – Direct-cash-benefit transfer needs to extend further to fertiliser and food – Push needed to ensure new goods and services tax regime begins from April 1, next year – Challenges in agriculture remain, notably in ushering a second Green Revolution to enhance productivity further – Create a national common market for farm commodities and Agricultural Produce Market Committees should be just one among numerous options to sell farm produce – Once a new law against back money abroad is enacted, strong follow-up mechanisms needed to ensure the return of ill-gotten stashed away by Indians abroad – Details on comprehensive bankruptcy code awaited – Public Sector Banks need a combination of fresh capital infusion, consolidation and freedom to hire talent and stronger mechanisms to address the issue of stressed assets – Details on promised consolidation of public sector banks awaited – New banking licences yet to be issued – No clear road map on comprehensive policy to tackle subsidies – Promised new policy on coal-bed methane still awaited – While existing ultra-mega power projects suffer, progress awaited in promised five new ones – Issue of minimum alternate tax yet to be resolved for past cases – Rationalisation of direct tax regime with low rates and minimum exemptions, seen as a major initiative to ensure compliance, remains a challenge – Delivery pending on proposed National Industrial Corridor Authority, based out of Pune, to oversee smart cities projects – Bill prepared but action awaited on higher investment limits for micro, small and medium units – Eliminating all exemptions for countervailing duty can eliminate the negative protection facing Indian manufacturers and help the ‘Make in India’ initiative without violating India’s international obligations – The recognised weaknesses in present public-private partnership model, the promised institution could be set up fast to remove impediments, notably the rigidness of contractual terms, and carving out of mechanisms for early redressal of disputes – Delivery awaited on the promised 50 ‘no frills’ airports in Tier-II and Tier-III cities – The oil ministry now needs to spell out how it intends to achieve the stated objective of creating 25,000 km of gas grid across the country.

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