Indian government sets out economic reforms

9 Jun 14
India’s new government has unveiled its economic reform package, focused on curbing inflation and the rapid creation of jobs.

President Pranab Mukherje eannounced the plans at the Central Hall of Parliament in New Delhi today, saying India was passing through an extremely difficult phase.

He noted that, for two consecutive years, India’s gross domestic product had been less than 5%, while tax collection declined and inflation ‘continued to be at an unacceptable level’.

Mukherjee said his government had set out a plan based on ‘rationalisation’ and ‘simplification’ of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth.

‘My government will make every effort to introduce the Goods and Services Tax. Reforms will be undertaken to enhance the ease of doing business. My government will follow a policy of encouraging investment, including through Foreign Direct Investment which will be allowed in sectors that create jobs and assets,’ he said.

‘For rapid creation of jobs in the manufacturing sector, the government will strategically promote labour-intensive manufacturing. Employment opportunities will also be expanded by promoting tourism and agro-based industries.

‘My government will strengthen the pension and health insurance safety nets for labour force of all categories and would provide them access to modern financial services.’

He also spoke of India’s lack of robust infrastructure, one of its major impediments.

‘The government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. A fast-track, investment friendly and predictable PPP mechanism will be put in place,’ Mukherjee continued.

This will include the modernisation and revamping of railways, which is ‘on the top of the infrastructure agenda’.

 

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