Staying on track for 2022

04 Aug 2020

The year 2022 will mark 75 years of India’s Independence, a poignant moment in our nation’s history.

The Government’s Strategy for a New India@75 developed by NITI Aayog in 2018 involves achieving many developmental objectives by the year 2022, using innovation, technology, enterprise and efficient management. It aimed at development as a ‘Jan Andolan’ or people’s movement.

The clarion call of Atma Nirbhar Bharat adds a new dimension of self-reliance to the development endeavour as a globally competitive and globally engaged India in a changing world. This is truly the mantra that will steer India towards 2022 with new drive and energy.

The Confederation of Indian Industry’s aim of achieving transformational economic and social goals by 2022 under its India@75 banner initiated in 2008 resonates well with the mission, with partnership as its central pillar. However, the advent of Covid-19 has placed the world in a recession and impacts India as well as we near the landmark year.

During the lockdown, the government has taken many concrete steps to stimulate growth and keep development goals on track. MSMEs are benefitting from the ₹3-lakh crore, collateral-free, government-guaranteed, automatic loan scheme; the ₹30,000 crore special liquidity scheme has also been well received. The Government has extended support to the industry by clearing dues and returning performance security, in proportion to contract work completed or supplies made.

The support extended to the rural sector and the bottom of the pyramid population has been in the form of direct cash and food transfers. Livelihood interventions, such as MNREGA and the Pradhan Mantri Garib Kalyan Rozgar Abhiyan, have also been actively supporting the rural economy.

The impact of these measures is already showing up in the recent positive economic indicators which are displaying a V-shaped trajectory. With encouraging railway freight revenues, GST inflows and exports in recent weeks, we can expect a faster recovery, underpinned by a good monsoon and robust agricultural growth.

At the same time, a boost to industry will be the catalyst that we need to achieve our aspirations for 2022. While government spending is expected to be a key engine of growth, reviving private investments will be critical to accelerate the GDP pace. Specific steps for unlocking land and labour will help stabilize and grow the economy even in the face of the pandemic.

Although India has moved dramatically upwards in the World Bank’s Doing Business rankings, much of the action now lies with the states. An effective online portal or single window system for new businesses could reduce the physical interface between business and government authorities and considerably quicken the process.

States also need to enable businesses to obtain land for industrial purposes in a simpler manner. Registering property for industrial purposes in India continues to be a cumbersome and costly process. Allowing industries to buy land directly from farmers and rationalizing stamp duty across states will streamline the acquisition process, as will the digitization and integration of land records and the setting up of a single-window system in all states.

A critical endeavour during the current health situation is to ensure that employment opportunities remain on the growth path. To enable large scale manufacturing plants, informal sector workers must have access to portable social security and industry should be able to enjoy flexibility in hiring.

Labour compliances and inspections should be reduced at the grassroots as well. Threshold limit for certain labour laws must be increased, while ‘Fixed Term Employment Workman’ rules in states should be notified and implemented. Every state should institute a single labour authority as a point of contact.

As exports are picking up, this can be an increasingly important source of growth and employment. To boost this further, the reform momentum in trading across borders needs to be sustained through further measures. The Single Window Interface for Facilitating Trade (SWIFT) needs to bring onboard all relevant participating government agencies.

With MSMEs being the bedrock of Indian industry and significant employers, unlocking their potential through access to finance, facilitating inspections and approvals, and enabling technology adoption will help growth substantially. Enabling measures such as exemption from approvals and inspections for three years can help them flourish.

With only two years left before we reach 75 years of our nationhood, a participatory approach of Government, industry, and society at large will remain the key instrument for ensuring our growth pace is accelerated. A re-energized Jan Andolan under the Aatmanirbhar mission with the strong partnership of all stakeholders promises to serve us well as we envision a new India@75.

This article was first published in The Live Mint on July 31, 2020