The budget for India this year received a great round of applause, for its dependability. Prime Minister Narendra Modi came to government with a majority in the lower house of parliament, but the opposition party, still controls the upper house. However, there isn’t a lot to be concerned about because steps are being taken to speed up the passing of laws, and these executive orders aim to fast help the need for land acquisitions, solely for industrial advancement.
Economic reforms are aiming to erase longstanding concerns for investors, who hope that the barriers to growth and investment, will be finally removed. Social security has been greatly debated as one of the ideas that will be rolled out under Modi’s government. Levelling to help reduce poverty lines and the deprivation scale, it goes well with the measures introduced to lower taxes on numerous local businesses, who pay too high of a tax rate, than can be deemed affordable in today’s present economic climate.
The new government wants to slash the tax rate to a 25percent from a 30percent, and this gambit is hopefully going to be rolled out with the next four years. This slash in tax rates can help India battle more successfully and gain a competitive streak amongst, neighbouring and transnational competitors. The gap in revenues is hoping to be accommodated by placing a greater tax on the superrich, but that is the least of India’s challenges because out of an 800mn working-age population, only 35mn Indians pay income taxes. New initiatives are being offered to tackle this black market activity that has spurned out, because of tax evasion, such as displacing money offshore.
Further off the subject of reigning in greater economic spending, is what can be done to increase the rate of development. There needs to be more disbursements on infrastructure, and the next year should see $11.3bn shelved primarily for projects like building more railways. Railways in India are mostly half-broken and creasing under age, so it is important to invest in this initiative. There has been talks of the creation of a sovereign fund to shelve for projects, but this is not helping ease investment concerns or address what would happen if the slow economic growth rate bubble suddenly decides to burst; perhaps including a sovereign-gold bond, would be a better proposal because gold monetisation could help investors accumulate more wealth.
Modi’s first budget was not impressive on most grounds, but specifically speaking, it lacked the kind of approach required to tackle wide-ranging economic deficit, but he has had months to prepare for the second. Industrial projects need to jumpstart the economy, they cannot be stalled, to address concerns over how these lands are meant for poor farmers, because as far as addressing the wealth agenda is concerned, that is an area that has also been taken into account. On the subject of poverty alone, numerous enterprising concepts such as welfare programs for the poor have been introduced. It remains to be seen, if India, soon to become the most densely populated country in the world, can urbanise itself better, while at the same time deal with the economic deficit, in a far better fashion, than before.