Three years of Modi government: how much better, how weak

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There are many such initiatives, including GST bill and reform of power and banking sector, which can be called the best in terms of economy.

May 17, 2017, 02.05 PM IST

Amit Mudgil
New Delhi. The Modi government has completed three years at the center. The government has many achievements to count, but many critics believe that there are four major spots on the government that can break the color of celebrations. Nearly three years ago, the Modi government came to power at the center with great fanfare. After this, the government indicated to implement several schemes including Make in India, Housing for All, Swachh Bharat Abhiyan and Jan Dhan Yojana.

There are many such initiatives, including GST bill and reform of power and banking sector, which can be called the best in terms of economy. Steps like demonetisation can be called the boldest steps in the history of independent India. Foreign portfolio investors were initially skeptical of Modi’s delivery ability, but now have full faith in him. Major international investor Mark Faber congratulates the Modi government for his steps, though he opposed demonetisation.

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As on December 31, 2016, Jubilant had a total of 73 ANDAs for oral solids filed in the US, of which 49 have been approved.

Despite having an excellent first three years, analysts continue to worry about these four steps


Sluggish pace of capital expenditure
The market has problems with sluggish pace of capital expenditure. Deutsche Bank has said in a report that public spending can hurt the investment process by staying within the ambit of fiscal discipline. The capital formation of the private sector has increased by only two per cent compared to last year.

Rating upgrade
The government has failed in its efforts to upgrade the rating of the economy. Chief Economic Advisor Arvind Subramaniam has lashed out at the ratings agencies several times in the open and has also questioned their rating method, but the ratings have not improved.

Fitch’s rating is still the lowest for India in terms of investment grade. In November last year, Standard & Poor’s also refused to change the ratings of the procession.

Ease of doing business
The government has made many reforms on its behalf, but still doing business in India is not so easy. Its ranking also has not improved much. According to the World Bank, India ranks 130 in terms of ease of doing business, 155 in terms of starting a business, 185 in getting permits for construction, 138 in property registration and 166 in implementing contracts and 106 in border trading.

NPA related issues
NPA related issues are a missing issue in India’s macro story. CLSA Chief Equity Strategist Christopher Woods said, “Once this issue is resolved, the road ahead will become easier for PSU banks. This will ease both the government and the Reserve Bank.

Topic

Modi

Bank

gdp

PSU

Marc faber

Gst bill

make in India

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