President Pranab Mukherjee addressed a joint sitting of Parliament on Monday outlining the roadmap of the Narendra Modi government. The government will function on the mantra of "minimum government, maximum governance," Mr Mukherjee said.
Here are the top 10 economic highlights of the President's Address
- Food inflation: Consumer price or retail inflation in India was at 8.59 per cent in April year-on-year after running near or above 10 per cent for almost two years through the end of 2013. High inflation has led to high interest rates and adversely impacted the country's growth. The Modi government would focus on improving the supply side of various agro and agro-based products, the president said today. The government is alert about the possibility of a subnormal monsoon this year and contingency plans are being prepared, he added.
- Economy: India's GDP growth has been sub-5 per cent for two straight years and tax collection has declined. The Modi government will usher the economy into a high growth path, rein in inflation, reignite the investment cycle and restore the confidence of the domestic as well as international community in our economy.
- Jobs: India needs to grow at 8 per cent per annum to create enough jobs for its young population, but a sharp slowdown in economic growth points to a demographic disaster. For rapid creation of jobs in the manufacturing sector, the Modi government will strategically promote labour-intensive manufacturing. Employment opportunities will also be expanded by promoting tourism and agro-based industries.
- Taxes: Retrospective tax laws, introduced in 2012-13, have been described as the single biggest impediment for foreign investment into the country. The Modi government will embark on rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth, the president said today. The government will make every effort to introduce the GST while addressing the concerns of states, he added.
- Reforms: Lack of consensus among politicians and policy paralysis led to scuttling of many reforms, damaging India's potential to grow over the last few years. The new government will follow a policy of encouraging investments, including through FDI; which will be allowed in sectors that help create jobs and assets, the president said.
- Agriculture: Government will increase investment in agri-infrastructure and address issues pertaining to pricing and procurement of agricultural produce, crop insurance and post-harvest management. Government will incentivize the setting up of food processing industries.
- Reviving manufacturing: India's manufacturing sector has been the biggest drag on overall economic growth over the last two years. The new government will set up world class investment and industrial regions, particularly along the Dedicated Freight Corridors and Industrial Corridors spanning the country. It will strive to move towards a single-window system of clearances both at the centre and at the states through a hub-spoke model.
- Infrastructure: Delays in getting road, rail and power projects approved hit infra companies had during the UPA rule. The new government has drawn an ambitious infrastructure development programme for the next 10 years. Modernization and revamping of Railways is on top of the agenda. Diamond Quadrilateral project of high speed trains will be launched. A fast, time-bound and well monitored programme for execution of the National Highways programme will be initiated. Low cost airports will be developed to promote air connectivity to smaller towns. Inland and coastal waterways will be developed as major transport routes.
- Energy security: The government will substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner.
- Urbanization: The government will build 100 cities focussed on specialized domains and equipped with world class amenities. By the time the nation completes 75 years of its Independence, every family will have a pucca house with water connection, toilet facilities, 24x7 electricity supply and access.