23 May 2019 marks as epic day in the history of India’s democracy, with the BJP government winning with a whopping majority. Once again the Indian people have given Narendra Modi the mandate to form the Government in India. The Indian voters have given clear majority to Modi’s BJP to form a stable Government because of his track record of past five years and have now put their faith in him for the next five.
PM Modi is all set to form the government for a second time with his opposition in shambles. With the Lok Sabha elections being held from April 11 to May 19 in different parts of India, the exit polls had predicted a landslide win for the NDA government and the actual result has not proved the exit polls to be untrue.
As we have seen in the last five years, a stable Government at the centre has led to bold and progressive reforms; case in point being GST and Demonetization. From an investors’ perspective also whenever a Government has come with a full majority instead of a weak coalition it has always lead to the formulation of stable policies and reforms by the Government which would benefit the investors in the foreseeable future. As usually in case of coalition Governments we have seen that the policies are sometimes diluted or curtailed to appease the coalition partners.
But what does it mean for doing business in India?
1. The BJP Government has promised to make India a $5 trillion economy by 2025 and the world’s third largest economy by 2030. Fiscal discipline, re-visiting the policy framework, Banking reforms, encouraging savings and re-energizing the engines of growth are some of the solutions cited to ensure economic growth.
2. The Government in its manifesto has promised to eliminate corruption with the use of technology-enabled e-Governance. Apart from that public awareness, policy-driven governance and simplification of the tax regime have also been cited as solutions to the problem of corruption.
3. BJP has said that it will rationalize and further simplify the tax regime in the next five years. It also said that it will bring on board all State governments in adopting GST, addressing all their concerns.
4. They have committed to invest $1.5 trillion in the Infrastructure sector over next five years. The Government has also committed to continue their existing milestone of constructing roads at an unprecedented pace and will construct 60,000 km of highways. They have proposed electrification of all railway tracks by 2022 and cover 50 cities by Metro.
5. For the past two decades, China has ruled the manufacturing landscape globally, especially in the sphere of hardware manufacturing. But India is beginning to catch up with its ‘Make in India’ initiative. Manufacturing has emerged as one of the high growth sectors in India. Under PM Modi’s Government, India is forecasted to become the fifth largest manufacturing country in the world by 2020
6. With the Make in India initiative, the government of India is all set to increase the gross domestic product (GDP) to 25% by 2022
7. When PM Modi first formed Government in 2014, India was ranked at 142nd position in Ease of doing business among 190 nations. In 2016 it moved to 131st, in 2017 to 100th and recently in 2018 it was ranked at 77th position.
8. The Government of India has released the draft for National Policy of Electronics (NPE) that envisages to create a sizeable $400 billion electronics industry in India by 2025.
9. Government of India to come up with a new industrial policy that envisions the development of a globally competitive Indian industry.
10. The Ministry of Defence, Government of India has approved the ‘strategic partnership’ model that enables private companies to tie up with foreign players.
All these initiatives will find a renewed boost with the re-election of the prevailing government in India.