In recent years, the Indian government has been making significant strides towards fiscal consolidation and reform. These crucial steps have been praised by experts and analysts, who believe that they will have a positive impact on the country’s economy. Let us take a closer look at some of the key measures taken by the government and how they will benefit the nation.
One of the most significant steps taken by the government towards fiscal consolidation is the implementation of the Goods and Services Tax (GST). This single tax system has replaced multiple indirect taxes, making the taxation process simpler and more transparent. The GST has not only helped in increasing tax compliance but has also boosted the country’s GDP growth. It is estimated that the GST will add 1-2% to the GDP in the long run, making it a crucial step towards fiscal consolidation.
Another crucial reform undertaken by the government is the Insolvency and Bankruptcy Code (IBC). This code has streamlined the process of resolving insolvency and bankruptcy cases, making it more time-bound and efficient. It has also provided a level playing field for all stakeholders, including creditors and debtors. The IBC has instilled confidence in the banking sector and has helped in reducing the burden of non-performing assets (NPAs). This, in turn, has improved the overall health of the banking sector, which is crucial for the country’s economic growth.
The government has also taken steps to improve the ease of doing business in India. The introduction of online portals for various government services has reduced the time and effort required for businesses to comply with regulations. This has not only made it easier for businesses to operate but has also improved India’s ranking in the World Bank’s Ease of Doing Business Index. The government’s efforts in this regard have been recognized globally, and it has been ranked among the top 10 improvers in the index for the third consecutive year.
In addition to these measures, the government has also focused on reducing its fiscal deficit. The fiscal deficit is the difference between the government’s total expenditure and its total revenue. A high fiscal deficit can have a negative impact on the economy, leading to inflation and a rise in interest rates. To address this issue, the government has taken steps to increase revenue and reduce expenditure. This has helped in bringing down the fiscal deficit from 4.5% in 2013-14 to 3.4% in 2018-19. The government has set a target of reducing the fiscal deficit to 3.3% in 2019-20, which is a crucial step towards fiscal consolidation.
Furthermore, the government has also focused on increasing revenue through disinvestment of public sector enterprises. This has not only helped in raising funds for the government but has also improved the efficiency of these enterprises. The strategic disinvestment of Air India, which was a loss-making entity, is a prime example of the government’s efforts in this direction. The disinvestment of other public sector enterprises is also in the pipeline, and it is expected to bring in significant revenue for the government.
The government has also taken steps to improve the agricultural sector, which is the backbone of the Indian economy. The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme, which provides direct income support to farmers, has been a game-changer for the sector. It has helped in increasing farmers’ income and has also reduced their dependence on loans. The government has also introduced various other schemes and initiatives to boost the agricultural sector, such as the Pradhan Mantri Fasal Bima Yojana and the Soil Health Card scheme.
Apart from these measures, the government has also focused on improving infrastructure in the country. The Bharatmala Pariyojana, which aims to develop 35,000 km of highways, and the Sagarmala project, which focuses on port-led development, are some of the key initiatives in this regard. These projects will not only improve connectivity but will also create job opportunities and boost economic growth.
In conclusion, the government’s efforts towards fiscal consolidation and reform have been commendable. The implementation of the GST, the IBC, and other measures have helped in improving the overall economic health of the country. The government’s focus on reducing the fiscal deficit and increasing revenue through disinvestment is also a step in the right direction. With these crucial steps, India is on its way to becoming a stronger and more resilient economy.
