INDIA REFORM
India must reflect & implement essential reforms to strengthen the arbitration process
The recent finance ministry notification in India has raised concerns by discouraging automatic arbitration clauses in procurement contracts. The move aims to address the unsatisfactory experience of the Government of India (GoI) in arbitration and promote mediation or court resolution for disputes. This decision has sparked a debate on the effectiveness of alternative dispute resolution methods and their impact on business dealings, particularly with global companies.
Budget should double standard deduction, raise basic exemption to Rs 3.5 lakh under new tax regime: EY
EY recommends significant tax reforms in the upcoming Budget, urging the government to double the standard deduction under the new concessional tax regime to Rs 1 lakh or increase the basic exemption limit to Rs 3.5 lakh. Key suggestions include maintaining corporate tax stability, rationalizing TDS provisions, and improving dispute resolution mechanisms.
Only comprehensive reform can enable UNSC to effectively manage global conflicts: India
India has urged for urgent reforms to the UN Security Council as the United Nations approaches its 80th anniversary next year, emphasizing the need to expand both its permanent and non-permanent categories to manage current global conflicts more effectively. This call was made by Pratik Mathur, Minister in India's Permanent Mission to the UN, during a UN General Assembly debate on the Annual Report of the UN Security Council.
What Indian industry wants from Modi's budget after poll setback
The upcoming budget aims to boost consumption, support farmers, create jobs, and reform tax systems. It focuses on tax cuts, lifting export restrictions, job creation incentives, and simplifying tax regimes like capital gains and GST for a stronger economic outlook.
Expectation is that reforms will continue, but it may not be as simple as that: Ketan Dalal
"Let’s take a look at some key areas where reforms are needed, but could be impacted; a crucial area of reforms is that of land reforms, given the need to promote India as a manufacturing hub and to leverage the China + 1 opportunity."
Waiver, other tax reforms top GST Council's docket
The GST Council is set to discuss various measures at its upcoming meeting on June 22 to pave the way for broader tax reforms in the new government's first full budget. These measures include considering a conditional waiver of interest or penalty on tax notices issued between 2017 and 2020, with exceptions for wilful defaulters. The budget announcement is expected in July.
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Capacity boost for EPFO, ESIC to pave way for labour reforms
The Social Security Code, 2020, passed by Parliament in 2020, entails extending social security to gig and platform workers. Some of the changes envisioned for retirement fund body EPFO in the short, medium, and long term include restructuring of its offices, business process re-engineering, and leveraging IT for automatic settlement of claims and cadre restructuring.
Strategic reforms in customs duties, GST, commerce to push India's inclusive growth, says GTRI
The think tank suggested increasing the GST exemption limit for a firm's annual turnover from 40 lakh to 1.5 crore as this will be transformative for India's MSME sector, promoting job creation and growth. Firms with less than Rs 1.5 crore turnover make up over 80 per cent of registrations but contribute less than 7 per cent of the tax collected, it said adding a yearly turnover of 1.5 crore equals 12-13 lakh monthly turnover, translating to just Rs 1.2 lakh at a 10 per cent profit margin.
Labour Codes: Secy to meet officials to take stock of state rules
The BJP-led NDA government is preparing to implement the four labour codes and will hold a meeting on June 20 with state labour secretaries and commissioners to review state rules. The aim is to align state rules with the Centre's model rules to ensure uniformity. Labour reforms are part of the government's 100-day agenda to enhance ease of doing business and attract investments. The government consolidated 29 central labour laws into four codes, with most states having framed rules across these codes.
Broader & lasting growth, jobs top FM Nirmala Sitharaman's to-do list
Finance Minister Nirmala Sitharaman released two tax devolution instalments totaling ₹1,39,751 crore to 28 states for development and capital spending.
CII: Continuity in reforms will make India developed Nation
The Confederation of Indian Industry (CII) believes that continuity in policy reforms under Prime Minister Narendra Modi's leadership will drive India towards becoming a developed nation. The CII president, Sanjiv Puri, stated that with a strong growth rate of 8.2% for 2023-24, the new government can implement further reforms to capitalize on global opportunities and strengthen the Indian economy's fundamentals. The CII is eager to collaborate with the new government to accelerate the nation's development journey.
Budget likely to stick to fiscal road map: UBS
UBS predicts that the new government will follow a medium fiscal consolidation path but with a populist tilt in its first budget after the elections. The RBI's higher-than-expected dividend transfer to the government provides fiscal leeway for populist spending, especially to support lower-income groups. The government is expected to target a fiscal deficit of 5.1% of GDP in FY25, aiming to reduce it further to below 4.5% of GDP by FY26. While tougher reforms may be challenging, supply-side reforms like manufacturing, labour laws, and skill development are likely to continue.
Economists expect big-bang reforms to continue under Modi 3.0
Modi is set to be sworn in for third term as India's Prime Minister in coalition government with key partners Telugu Desam Party and Janata Dal (United). Economists anticipate focus on economic reforms to achieve goal of Vikshit Bharat by 2047. Budget to prioritize infrastructure, manufacturing, and welfare schemes amid global economic challenges.
Modi 3.0: How different will be the third Modi government
Narendra Modi is scheduled to take take oath for the third term as India's Prime Minister in a changed political landscape. Allies demand concessions, potentially affecting economic agenda. Expectations for populist budget with focus on welfare and rural areas, though concerns raised over economic impact. Reform agenda may face challenges due to weakened mandate, but continuity likely in infrastructure investment and business environment improvements.
RBI unveils ambitious reform agenda for centenary celebrations in 2035, charts out 14-point action plan
The Reserve Bank of India aims to become a role model for central banks in developing countries by its centenary in 2035. Governor Shaktikanta Das outlined a 14-point plan, including enhancing India's global presence, positioning itself as a leader in monetary policy, and promoting financial inclusion. The plan also focuses on internationalizing the rupee, boosting credit availability, and addressing challenges from technologies like AI/ML.
Lok Sabha results won't force India's budget to make significant policy shifts: Fitch
Fitch Ratings anticipates minimal policy shifts in India post-election losses. The upcoming July budget will detail economic reform plans and fiscal goals for the next five years, crucial for addressing fiscal metrics, reducing debt, potential deviations from capital expenditure commitments, the risk of heightened social spending, progress in judicial reforms at the state level, and reforms in the manufacturing sector.
Lok Sabha Results: Coalition govt is back. Will policy paralysis too strike again?
Over the past decade, Narendra Modi has propelled India's economy to become one of the fastest-growing globally, positioning it to soon rank as the world's third-largest. His emphasis on reforms and dynamic policies, exemplified by initiatives like Make in India, has bolstered manufacturing and infrastructure growth. However, the recent Lok Sabha election results, leading to a coalition government, raise concerns about potential challenges and policy paralysis ahead. Expert analyses suggest that while coalition governments have historically been effective in driving economic growth, they have struggled to control inflation.
Coalition politics, weakened mandate could make passing legislations on ambitious reforms challenging: Fitch
Fitch Ratings predicts that the new government in India, led by Narendra Modi, will face challenges in passing legislation on ambitious reforms due to coalition politics and a weakened mandate. Major reforms to land and labour laws will remain on the agenda, but these have been contentious and the NDA's weaker mandate could complicate their passage further. The BJP fell short of a single-party majority in the 543-seat lower house of parliament for the first time since its latest period in government in 2014.
Modi 3.0 has heavy lifting to do on tax reforms to managing stock risks
Economists outline key priorities for India's incoming government, emphasizing the need for growth, job creation, and macro stability. Pronab Sen highlights the importance of sustainable livelihoods, while Pranjul Bhandari suggests that 'easy' reforms could maintain 6.5% growth. However, achieving 70 million jobs requires politically sensitive reforms in agriculture, labor, and land. Additional recommendations include infrastructure investment, judicial reforms, enhancing export competitiveness, and further tax reforms, particularly bringing petroleum and power under GST.
Expect broad policy continuity with focus on capex: Ratings agencies
Economists emphasize the new Indian government's need to focus on growth, job creation, fiscal stability, tax reforms, and risk management. Reforms in land, labor, and capital markets are crucial, along with fiscal consolidation and increased government spending to attract private investments. They suggest balancing pro-consumer policies in agriculture and tackling judicial delays. These efforts aim to sustainably boost job creation and income levels, with the potential to raise India's economic growth to 7.5-8% over the medium-to-long term.
Brute majority or coalition pressure, India's growth to be perpetual theme
India's growth story may thrive under a coalition rule despite no party having an absolute majority. Past data suggests coalition governments have effectively boosted growth but struggled with inflation. Inflation rates varied under different regimes, with Narendra Modi's government seeing 5.4% inflation during its tenures.
As India steps back into coalition era, uphill road for tough reforms
In the new coalition government era, India's reform agenda may prioritize job creation and factors market reforms. Balancing political sensitivities and reform priorities will be crucial for the government in navigating coalition dynamics and opposition pressures.
Macro policy choices unclear, but work cut out on reforms agenda
In FY24, nominal GDP grew 9.6%, CPI inflation recorded 5.4%, and real GDP growth was estimated at 8.2%.
Modi retaining power under changed circumstances to make reforms challenging: Economists
Economists warn that PM Narendra Modi's retention in power after the general elections under 'changed circumstances' will pose challenges for implementing critical reforms.
New govt to inherit strong economy, focus on making India developed nation by 2047
India's record-breaking economic growth rate and strong tax revenues provide a foundation for future reforms aimed at transforming the country into a developed nation by 2047. The new government must address challenges such as unemployment and rural distress, while also focusing on controlling inflation. Despite potential obstacles, experts expect continued infrastructure-led growth, investor-friendly policies, and reforms to maintain India's economic momentum and attract investment.
Will an empowered Modi bring back a big-bang reform?
If exit polls are accurate and Prime Minister Narendra Modi returns to power with a strong majority, major economic reforms are expected. This might include revisiting land acquisition laws to facilitate industrial growth. Land reforms are crucial for India's manufacturing ambitions. Digitisation of land records could streamline processes and accelerate development projects.
Modi plans post-election reforms to rival Chinese manufacturing
Indian Prime Minister Narendra Modi is planning business-friendly measures if he secures a third term, aiming to boost domestic manufacturing by easing labor regulations, offering subsidies, and reducing import taxes. Modi's vision includes creating industrial zones to attract global firms, but challenges remain with restrictive labor laws, land acquisition, and high import tariffs. His reelection campaign emphasizes economic development and positioning India as a manufacturing hub.
Stage set for new government to press on next-generation reforms
India will continue to be the world’s fastest-growing economy and the Indian-corporate world has its hopes up as it expects the next government to continue on the reform path and steer the Indian economy towards high growth.
If Modi wins India's mammoth Lok Sabha elections, his third regime will need tough reforms to lure foreign firms
Lok Sabha Elections: As Modi gears up for a potential third term, global firms highlight challenges facing India's economy: policy inconsistencies, bureaucratic delays, and scarcity of land. Despite improved business sentiment, actual investment remains stagnant, with foreign direct investment dropping. Key priorities for the new government include policy coordination among states, labor law implementation, skills development, land reform, trade measures, and fulfilling BJP's promises for economic growth and global manufacturing hub status.
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