The introduction of the reform-oriented proactive fiscal policy of Narendra Modi-led National Democratic Alliance (NDA) government has led the significant changes in the economy with regard to the fiscal policy aspects. Certainly, good economics does pay in the long run. Most importantly, the Narendra Modi-led NDA government made an earnest attempt to bring greater transparency in the implementation of government schemes.

The Policy Stance:

To its credit, the government has avoided shortcuts to growth using monetary and fiscal policies and most of the reforms/repair initiated in the past four years remain works in progress. These will bear fruit in the medium to long term if relentlessly executed.

Key Successes:

Direct tax compliance has shown a clear improvement in the past two years, following the income declaration scheme and demonetization. Direct tax buoyancy improved to 1.9 in fiscal 2018 from 0.6 in fiscal 2016 as growth in direct tax collections accelerated even as GDP growth slowed down. GST, despite a shaky start, is expected to speed up formalization and further push tax compliance.

According to a World Bank study, 80% of Indian adults have a bank account today which is the same as in China, and up from 35% in 2011, but the report card must take note of three other factors: formalization of the economy, financial inclusion, and digitization. None of this impacts you directly or immediately: you don’t get richer or pay less tax, but consistent efforts towards this end suggest that you get a clean and efficient economy which then has an impact on the tax rate, inflation, and financial repression.

1. Bank recapitalization

The Narendra Modi-led government had unveiled a massive Rs 2.11-lakh crore two-year road map to strengthen NPA-hit public sector banks (PSBs) which includes recapitalization bonds, budgetary support, and equity dilution. In the last three-and-a-half years, the government has pumped in more than Rs 51,000 crore capital in public sector banks.

The finance ministry has urged PSU banks to improve their performance, resolve stressed assets and lower their dependence on the government for capital. Gross NPAs in public sector banks rose from 5.43 percent (Rs 2,78,466 crore) in March 2015 to 13.69 percent (Rs 7,33,137 crore) as of June 2017.

2. Crackdown on shell firms

Intensifying its crackdown on black money, the government has collated information about 5,800 shell companies whose near zero-balance accounts saw nearly Rs 4,574 crore of deposits post note ban and Rs 4,552 crore withdrawal thereafter.

“Vital information has been received from 13 banks regarding the bank account operations and post-demonetization transactions of some of the 2,09,032 suspicious companies that had been struck off the Register of Companies earlier this year”.

The Indian economy will grow at 7.2 percent in 2018 and accelerate to 7.4 percent in the following year as a result of robust private consumption, public investment and structural reforms, but it still faces the risk of sudden capital withdrawal on account of monetary policy normalization in developed countries, a United Nations report has said.

3. Tax rationalisation

The implementation of goods and services tax (GST) is yet another move to increase transparency. GST collapses many taxes into one tax, and the idea is to reduce the tax burden and also increase compliance. This is a step towards formalizing the economy, and the result of efforts such as these has been an increase in the tax base.

The GST is the biggest tax reform being undertaken since independence. It will subsume all indirect taxes to create one rate and integrate the country into a single market. Once the GST is in force, it will replace at least 17 state and federal taxes and bring them under single unified tax structure.

GST is a comprehensive indirect tax on manufacture, sale, and consumption of goods and services throughout India to replace taxes levied by the central and state governments. It is expected to bring about a qualitative change in the tax system by redistributing the burden of taxation equitably between manufacturing and services.

4. Income Tax

In the last four years, there has been a substantial increase in the number of returns filed and the amount of tax collected. According to the income tax department, while 37.9 million ITRs were filed in FY14, 68.4 million ITRs were filed in FY18 with an increase of 80.5%.

“Removal of cumbersome processes, rationalization of tax rates, digitization, and promotion of cashless economy has been a priority of the government.”

5. Demonetisation

Last year on November 8, the Prime Minister scrapped old Rs 500 and Rs 1,000 notes to what he called a step to root-out black money and fake currency in the system. Six months later, it was noticed that the move couldn’t achieve the desired results as fake currencies were still running and corruption was still rampant.

However, the government succeeded in profiling the people by getting to know the differences between the actual flow of money and the undeclared money. In last assessment year, there were only 5.5 lakh people out of the 3.65 crore individuals who filed returns, paid income tax of more than Rs 5 lakh and accounted for 57 percent of the total tax collection. This essentially means that only 1.5 percent of those filing tax returns (3.65 crores) were contributing to 57 percent of tax kitty. The Prime Minister wanted to address this issue by bringing the unaccounted money into banking channel.

While many top-notch economists were divided over its impact on the economy, former UIDAI Chairman Nandan Nilekani hailed Modi’s demonetization move and said that it would see a massive activation of digitization of financial services in the country. He also explained as to how India’s over 80 percent workforce will come into a formal channel.

He said: “The more important thing is the economy becomes formal when everybody’s financial transactions are digitized. India is going to go from data-poor to data-rich, and that will make it more and more difficult for people to do dishonest things or to be outside the system. You will reduce the amount of black money in the system.”

6. Digitization

Ease of transaction greatly improved with the launch of mobile wallets and ultimately the Unified Payments Interface or UPI, which was launched just months before demonetization. UPI allows a user to transfer money from one bank account to another instantly using a cell phone and is set to trump the popularity of e-wallets that shot to fame right after demonetization. E-wallets allow you to make payments without using internet banking, but the wallet itself needs to be loaded first.

“Senior citizens and others who were not using digital payments have taken a lot of effort to understand digital payments. Demonetisation too has had a major impact. Some areas like government, educational institutions or housing societies who were cash- or cheque-based traditionally have now adopted digital payments in a big way.”

“The policy reforms and objective towards lowering corruption and establishing an institutional structure in certain sectors has resulted in moving towards formalization of the economy. This, in turn, aids financial inclusion and better direct tax adherence; the direct tax to GDP ratio has grown at an annualized 22% for the last three years. Along with this, focus on inflation has meant that the rally in financial assets was strong.”

7. Insolvency and Bankruptcy Code

The Modi government can pat itself on the back for implementing a comprehensive bankruptcy law, India’s version of the Chapter 11 regulation in the US Bankruptcy Code. Ever since its implementation in 2016 though, the IBC has been the subject of legislative and regulatory tinkering by parliament, the Insolvency and Bankruptcy Board of India and the Reserve Bank of India.

These encumbrances notwithstanding available data analyzed by BloombergQuint show that operational creditors have overwhelmingly outnumbered corporate debtors in using the provisions of the law—by as much as 87%—so much so that the latter are beginning to pay them even before they trigger the IBC.

8. Financial inclusion

The other significant highlight of the government is in the field of financial inclusion. According to data updated on Pradhan Mantri Jan DhanYojana’s website on 9 May, there are about 316 million beneficiaries with deposits of around Rs 81,203.59 crore.

If Jan Dhan got the economy banked, insurance through the Pradhan Mantri Jeevan Jyoti Bima Yojana (life insurance) and Pradhan Mantri Suraksha Bima Yojana (accident insurance) have given financial comfort at rock bottom prices.

9. Equities

The formalization of the economy has also meant building confidence in equities as an asset class. Today domestic flows and not foreign institutional investments (FIIs) are supporting the equity market, and more and more people are investing in equity systematic investment plans (SIPs). This is important because over the long term and on a post-tax basis fixed income, gold or real estate don’t deliver.

Equity market valuations have remained elevated throughout the Modi government term so far.

10. The Benami Transactions (Prohibition) Amendment Act

The Modi government saw a tightening of a law against black money in property. India’s long war against unaccounted-for, tax-evaded money has been through what is known as ‘benami’ transactions through the purchase of property in one person’s name but financed by another who also controls it. The 1988 Benami Property Transactions Act was weak — no powers of a civil court, no specific provisions for vesting of confiscated property, no appellate structure defined.

The Benami Transactions (Prohibition) Amendment Act, in force since 1 November 2016, empowers authorities to attach provisionally and eventually confiscate benami properties. It also carries jail terms of between one and seven years and a fine that can be up to 25% of the fair market value of the property. Within six months of the Act coming in force, the authorities identified more than 400 benami transactions, including deposits in bank accounts, plots of land, flats, and jewelry with more than 240 properties with a market value of more than Rs 600 crore being provisionally attached.

So far throughout his term, Narendra Modi government has been the forerunner in implementing people-centric fiscal policies and at the same time taking all efforts to put the economy in higher growth trajectory.

Today, India tagged as the fastest growing economy in the whole world. The size of the economy has grown to 2.54 lakh crores which made it the 7th largest economy in the world. In this article, we have compared the changes in the different sectors of the economy of India from 2014 to 2017. In this article basically, we have compared three years of the current NDA government which resumed office in 2014 and performance of previous UPA government.

In this article, we have explained the changes in the different areas of the Indian economy. Let’s have a look.

1. Size of Economy

Image source: Forbes

2. Inflation Rate

Wholesale Price Index-WPI:

In 2013-14:  5.2% (Base Year -2004-05)
In 2016-17: 1.7% (Base Year -2011-12)

Consumer Price Index-CPI:

In 2013-14:  9.4% (Base Year – 2004-05)
In 2016-17:  4.5% (Base Year – 2011-12)

3. Expenditure on Education

A. The expenditure on education during the UPA government was Rs. 65,867 crore which has increased to Rs. 79,868 crore in the regime of NDA in 2017-18.

B. During the UPA government’s regime (2013-14), the total number of universities in the country was 723 which have increased to 799 in the NDA regime (2016-17). It means during the NDA regime, 76 new universities have been established.

C. In the time of UPA (2013-14), the total colleges in the country were 36,634 which have increased to 39071 during the NDA regime (2016-17) which means 2437 new colleges have been established.

D. In the time of UPA (2013-14), the total number of schools in the country was 1518160 which have increased to 1522346 during the reign of NDA. Thus, 4186 new schools have been added.

4. Tax Collection

Image Source: PIB

During the current NDA government’s tenure, the highest increase was in the income earned from excise duty. This income was Rs. 1.70 lakh crore in 2013-14 which increased by 139% during the tenure of the NDA government to Rs. 4.06 lakh crore. During the UPA government, the total tax collection in 2013-14 was 8.16 lakh crore which has increased to 12.27 lakh crores in the current government with an increase of 50%. Property tax has been abolished in the year 2016-17.

5. Expenditure on Health

source:www.hastakshep.com

In the year 2013-14, the UPA government used to spend only 1.2% of GDP on health which has been increased to 1.4% in 2016-17. The NDA government has made a provision of Rs. 48,878 crore for the health sector for the year 2017-18 which was Rs. 37,330 crore in the year 2013-14.

The current government has declared a new National Health Policy in 2017 under which it aims to increase the average age from 67.5 years to 70 years by 2025 with a target of 2.5% of GDP on healthcare.

6. Agriculture Production

Image source: Business Standard

In 2013-14, the production of food grains in the country was 2650 lakh tonne which is estimated to be around 273 lakh tonnes in 2016-17. Agriculture growth during the UPA regime was 4.01% which has increased to 4.83% in 2016-17. NDA government has targeted a loan of Rs 10 lakh crore to farmers this year, while farm loan of 7.11 lakh crore was distributed in UPA regime.

7. Employment Generation

In the financial year 2015-16, nearly 1.35 lakh jobs were created in the country, while it was 4.20 lakh during the UPA regime. However, in 2016-17, 2.13 lakh new jobs have been created in India in which key contributing sectors were service, manufacturing, and trade. At present, more than 30% of the youth aged between 15 to 30 years in the country are either unemployed or not taking training. So it can be concluded that the overall performance of the Modi government is not up to the mark in terms of the employment generation.

8. Housing for All

According to the 2011 Census, 27% of people in the cities live in the rented houses. Under the Prime Minister’s housing scheme, 18 lakh houses have been allowed to be built. While during the UPA regime, a total of 13.82 lakh houses were constructed in the tenure of 10 years. The present NDA government has allocated Rs. 15 lakh crore for 2016-17. It is worth to be mentioned that by 2022, India will need 30 million houses.

9. Industrial Development

In the year 2013-14, the contribution of the industrial sector in the country’s GDP was 31.60% which is expected to fall to 31.12% in 2016-17. During the current NDA government, the industrial growth rate is 4.5% which is slightly better than the previous UPA government’s 4.2%. In the year 2013-14, 25.30 lakh cars were sold in India, while in the present government, the figure was 30.46 lakh in 2016-17.

10. Foreign Direct Investment

Image source: DIPP

In 2013-14, the inflow of Foreign Direct Investment in India was $36 billion which has increased to $55 billion in 2016-17. The Modi government has increased the FDI limit for cable and DTH services from 74% to 100%, whereas this limit has been increased from 26% to 49% for news channels and radio channels.

Now it can be concluded that the NDA Government performed better than the previous UPA government. That is why the economic prospects of the Indian economy look very encouraging except employment generating activities.

India has a very bright future ahead because currently, 55% of the Indian population is below the 25 years which made it the youngest economy in the world. That is the reason that the whole world is looking towards India for getting its young talent.

गुरुवार 14 फ़रवरी को CRPF जवानों पर हुए पाकिस्तान समर्थित आतंकी संगठन जैश-ए-मोहम्मद के कायराना हमले के बाद से भारतीय उपमहाद्वीप की परिस्थितियां बहुत हद तक बदल गई है। जहाँ एक तरफ पूरे भारत में इस हमले के बाद लोगों में पाकिस्तान के प्रति बहुत गुस्सा है वहीं शहीद हुए जवानों के परिवारों के लिए संवेदना भी है। एक तरफ जहाँ देश के कोने कोने में पाकिस्तान के विरुद्ध प्रदर्शन हो रहे हैं वहीं साथ ही साथ देश भर से शहीद हुए जवानों के परिवार के लिए आर्थिक सहायता भी आ रही है। देश का ये ज़ज़्बा बताता है की हमारे बीच चाहे जितनी भी समस्या हो हमारी एकता को कोई बाहरी ताकत नुकसान नहीं पहुंचा सकता है।

बहरहाल अगर इस आतंकी हमले के बाद की स्थितियों पर गौर करें तो प्रधानमंत्री नरेंद्र मोदी जी की सरकार हर तरफ से पाकिस्तान पर दवाब बनाने की रणनीति पर आगे बढ़ रही है। एक तरफ विश्व समुदाय में पाकिस्तान को अलग थलग करने के लिए बहुत सारे देशों के उच्चायुक्तों के साथ बैठके की गई हैं साथ ही साथ आर्थिक चोट पहुंचाने के लिए पाकिस्तान से “मोस्ट फेवर्ड नेशन” का दर्जा छीन लिया गया है। साथ ही साथ पाकिस्तान को निर्यात की जाने वाली सभी 137 चीजों पर निर्यात शुल्क 200% बढ़ा दिया गया है।

पाकिस्तान से सिर्फ भारत ही परेशान नहीं है बल्कि दो और पड़ोसी देश इनके कृत्यों से परेशान हैं। इन दो देशों में शामिल हैं ईरान और अफग़ानिस्तान। ये दोनों ही देश भारत के अच्छे दोस्त हैं और दोनों ही पाकिस्तान द्वारा समर्थित आतंक के भुक्तभोगी भी हैं। हाल ही में ईरान में भी वैसा ही आतंकी हमला हुआ जैसा पुलवामा में हुआ था। इस हमले से ईरान भी पाकिस्तान से बहुत नाराज़ है और सबक सिखाने की बात कर रहा है। ऐसे में हो सकता है की पीएम मोदी जी की सरकार इन दोनों मित्र देशों के साथ मिल कर पाकिस्तान की घेराबंदी करें।

हालांकि भारत अब इतना कुशल राष्ट्र हो गया है की वो खुद भी अपने मुद्दे हल कर सकता है। साल 2016 में आतंकियों द्वारा किये गए उरी हमले के बाद भारत ने इसका नमूना विश्व को दिखाया भी था जब सर्जिकल स्ट्राइक के तहत पाकिस्तान सीमा में घुस कर कई आतंकी लांच पैड्स को नेस्तनाबूद कर दिया गया था।

वैसे ख़बरों के अनुसार इस बार पुलवामा आतंकी हमले के बाद पाकिस्तानी सीमा से लगे सभी आतंकियों के लॉन्च पैड्स को खुद पाकिस्तान ने डर कर हटा लिए हैं। इसके बावजूद भारत ने अपना काम शुरू कर दिया है और इसका पहला असर सोमवार सुबह देखने को मिला जब कश्मीर के पुलवामा में छुपे आतंकियों को सेना ने मार गिराया। ये तो बस शुरुआत है और जल्द ही CRPF जवानों की शहादत का बदला भारतीय सेना पीएम मोदी जी के नेतृत्व में ले लेगी।

Nearly 42 Central Reserve Police Force (CRPF) personnel were killed, and many got others injured when terrorists targeted a convoy with a car bomb at Awantipora in Jammu and Kashmir’s Pulwama district on Thursday. It has been regarded as the worst attack ever on security personnel in the state.

Reports suggested that the vehicle used by the terrorists was a Mahindra Scorpio carrying more than 350 kg of explosives. The bus that was hit had 39 personnel. Bullet marks on the bus indicated that more terrorists might have fired at the convoy by hiding after the explosion. According to news agency IANS, the Srinagar-Jammu highway had been shut for the last two days due to bad weather, thus several military personnel were carried in one go. The convoy had left Jammu around 3:30 AM.

The injured have been moved to the army base hospital in Srinagar, 20 km from the attack site. Pakistan-based terrorist group Jaish-e-Mohammed has claimed responsibility for the attack.

Home Ministry sources said that terrorists triggered the car bomb while 78 vehicles with over 2,500 CRPF men were on the Srinagar-Jammu highway. The stretch on which the incident occurred had been sanitized earlier in the morning, and authorities have termed it as a “serious breach” of security.

Photographs showed charred remains of vehicles and human body parts littered across the highway, alongside blue military buses. Official sources said that the attack was carried out by one Adil Ahmad Dar alias “Waqas Commando.” A resident of Kakapora, he had joined the terror outfit last year.

Condemning the attack, the government in a strongly-worded statement, demanded that “Pakistan should stop supporting terrorists and terror groups operating from their territory.” The center also appealed to the “international community to support the proposal to list terrorists, including Jaish-e-Mohammed Chief Masood Azhar, as a designated terrorist under the 1267 Sanctions Committee of the UN Security Council.”

Prime Minister Narendra Modi tweeted that the sacrifices will not go in vain. “The attack on CRPF personnel in Pulwama is despicable. I strongly condemn this dastardly attack. The sacrifices of our brave security personnel shall not go in vain. The entire nation stands shoulder to shoulder with the families of the brave martyrs. May the injured recover quickly,” he said.

Union Home Minister, Rajnath Singh, immediately rushed to Srinagar to review the situation and has assured that a strong response will be given to the terror attack. He said, “We completely understand our responsibilities… will take whatever action is necessary.”

The National Investigation Agency will probe the attack along with the Jammu and Kashmir Police.

This is the worst terror attack to take place in Kashmir since the start of the century. On October 1, 2001, three terrorists had rammed a Tata Sumo loaded with explosives into the main gate of the Jammu and Kashmir State Legislative Assembly complex in Srinagar — killing 38 people.

The scale of this terror strike exceeded even that of the Uri attack on September 2016, when four heavily armed terrorists targeted an army brigade headquarters — causing 19 deaths. The Indian army had responded with a cross-border surgical strike in which many terror launch pads were destroyed.

“Everyone’s Blood is Boiling,” Said PM in Message to Pak Over Pulwama

“I want to tell the terrorists and their backers…they have made a big mistake. You will have to pay a very heavy price…I assure everyone that the forces behind the attack…we will bring them to justice,” PM Modi said in Delhi after chairing a top-level security meeting with senior ministers.

He also called for all parties to stand united and rise above politics. “I urge everyone it’s an emotional and sensitive time. Whether in the government or opposition, we must stay away from politics. The country is together. Our unity will be a big factor in defeating the enemy.”

The Prime Minister also referred to “big nations” who had condemned the attack and supported India. “When all countries come together, terrorism will not survive for long.”

The US, in a strong statement, has called on Pakistan to “immediately end support and safe haven to all terrorist groups.”