Following up with its plans to rebuild the economy of the country ravaged by the coronavirus pandemic, the government may soon announce a number of fresh measures, including policy changes & large scale infrastructure projects, aimed at making local industries more competitive.
Government sources indicate that some of these measures, which may include reorganising the tax administration, may be unveiled by none other than Prime Minister Narendra Modi himself. The proposed plans shall come after the Pradhan Mantri Garib Kalyan Yojana and the Atmanirbhar Bharat Abhiyan measures. While both of these aimed at providing a cushion to the economy ravaged by the coronavirus, the next set of measures will be focused more on rebuilding it.
The proposals that are currently being worked upon include an increased digitization of the tax administration that enshrines taxpayers’ rights, frontloading defence purchases, and speed up spending on key infrastructure projects, which will thereafter have a strict deadline.
On the manufacturing side, the main aim of the proposals is enhancement of the competitiveness of domestic industries, while easing setting up operations in the country for foreign manufacturers and making it more lucrative for them. Recently released data by the government indicates a contraction of industrial production by nearly 36% in the June quarter. The proposed measures will attempt to counter this downward slide. They were designed based on feedback from global manufacturers, who had indicated their requirements and incentives for setting up factories in the country. Government sources indicate that thorough deliberations have taken place to come up with a broadly structured plan to boost local manufacturing and make the country more self reliant and a mixture of supply side & demand side measures will be introduced.
In addition to the above, the government has increased tariffs on many products, as well as demanded import licensing for others. These measures will make goods from overseas more expensive, and will hopefully encourage domestic production.
Soon after the nationwide lockdown was imposed at March end, the Pradhan Mantri Garib Kalyan Yojana was announced, which provided free foodgrain as well as cash payments to the impoverished senior citizens, women, and farmers. Subsequently in May, the Rs 20-lakh-crore Atmanirbhar Bharat package was announced, and this included, among other measures, a credit guarantee scheme for the MSMEs, as well as key reforms in the agriculture & farming sector. Buoyed up by these two packages, rural demand has managed to remain strong. Now, the next set of economic measures will very likely focus on the urban regions by providing backing for businesses and securing jobs.
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