Stressing on a tax structure that leads to vibrant economy, Mayank Taurani asserts that reforms signify more than mere policy adjustments. They represent a transformative journey that has the potential to unlock new avenues of growth, attract coveted investments, and lay the groundwork for a sustainable and prosperous future for generations to come.
In today’s rapidly evolving global economy, nations must adapt and innovate to secure their positions on the world stage. The Indian economy, with its inherent potential and diverse sectors, stands as a testament to this principle.
As the nation strives to assert itself as a formidable global economic powerhouse, the implementation of comprehensive economic reforms emerges as a pressing imperative.
These reforms signify more than mere policy adjustments; they represent a transformative journey that has the potential to unlock new avenues of growth, attract coveted investments, and lay the groundwork for a sustainable and prosperous future for generations to come.
Simplifying tax policies
Central to the flourishing of any vibrant economy is a tax structure that not only promotes investment but also acts as a catalyst for the expansion of businesses. However, the intricate labyrinth of tax policies and business regulations can often act as a deterrent for both local and foreign investors, impeding their active participation in economic endeavours.
The urgency to simplify and streamline these convoluted frameworks cannot be overstated. By forging a seamless and harmonised tax regime, India has the potential to augment investor confidence and invigorate the growth of small and medium-sized enterprises (SMEs). This crucial simplification has the potential to alleviate the weight of compliance burdens and cultivate an environment conducive to entrepreneurial growth.
As the economic landscape evolves, the necessity to recalibrate the tax system and business regulations becomes increasingly evident. The current intricate network of rules and regulations act as a formidable barrier, dissuading potential investors from engaging in the economic tapestry of the nation.
The Indian government instituted one of the most significant reforms in its fiscal history – the Goods and Services Tax (GST) on July 1st, 2017. Regarded as a game-changing reform, GST transitioned India towards ‘One Nation, One Tax.’ The benefits have been manifold, extending across economic sectors and comprising reduced tax complexity, inflation moderation, and a boost to economic growth.
One immediate advantage of GST has been the reduction of ‘tax on tax,’ or the Cascading Effect. The previous regressive tax structure posed a burden on the consumers because each successive point in the supply chain taxed individuals on the cumulative cost until the product reached the end consumer. However, by replacing multiple indirect taxes, GST has ensured that tax is levied only on the amount of value added at each stage, cutting down on excess tax liabilities.
Supporting small businesses
Small and medium-sized enterprises (SMEs) form the bedrock of any thriving economy, fostering innovation, generating employment opportunities, and nurturing a spirit of entrepreneurship. However, the existing intricate tax structure and regulatory landscape often disproportionately affect SMEs, stifling their growth potential. By embarking on the journey of simplification, India has provided these enterprises with the much-needed impetus to flourish.
Imagine a scenario where the cumbersome process of deciphering intricate tax codes is replaced by a more straightforward and streamlined system. This transformation would empower SMEs to allocate their resources more efficiently, directing their focus towards innovation, expansion, and job creation.
The ramifications of such simplification extend beyond the realm of economics. A business-friendly environment has the potential to cultivate a culture of entrepreneurship. With these economic reforms, India is attracting more foreign direct investment that is further spurring economic growth.
Cultivating the seeds of progress
Innovation and entrepreneurship are integral to propelling an economy towards prosperity. Nurturing a culture that celebrates these pillars requires strategic reforms that provide the necessary support systems. Encouraging start-ups and innovators involves facilitating access to capital through venture funding, incentivising research and development through tax benefits, and establishing incubation centres that serve as bastions of mentorship and resources for aspiring entrepreneurs.
By doing so, India is laying the foundation for a vibrant ecosystem that drives economic growth through cutting-edge ideas and creative enterprises. The Pradhan Mantri Mudra Yojana is a scheme providing loans up to 10 lakh to non-corporate, non-farm small / micro-enterprises.
The infrastructure of a nation serves as the backbone upon which economic activities thrive. A robust economy necessitates efficient transportation networks, reliable energy sources, and advanced communication systems.
Reforms in this realm have ensured increased investment, both public and private, in infrastructure projects. Embracing pioneering technologies to enhance operational efficiency and ensuring the timely execution of projects are pivotal steps in preventing bottlenecks that hinder progress.
Foreign Direct Investment (FDI) policy reforms are bringing more foreign funds into the country. Some of these are – raising the FDI cap in insurance and defence sectors, allowing 100 per cent FDI under automatic route for real estate broking service, etc.
Ease of doing business
India’s position on the “Ease of Doing Business” index has garnered attention, and the imperative for improvement is clear. Reforms aimed at elevating this ranking involve the simplification of bureaucratic processes, reduction of red tape, and digitalisation of government services.
A transparent and efficient regulatory framework serves as a magnet for both domestic and foreign investors, spurring job creation and catalysing economic expansion.
The financial sector plays a pivotal role in greasing the wheels of economic progress. Comprehensive reforms within this sector encompass bolstering banking and financial institutions, expanding access to credit for individuals and businesses, and promoting financial literacy among the populace.
A well-regulated and transparent financial ecosystem is indispensable for effective capital allocation and prudent risk management, both of which are vital for sustainable economic growth.
Demonetisation, as executed by the Indian government in 2016 under Prime Minister Narendra Modi’s rule, was a significant economic policy aimed at combating the issues of black money, or unaccounted wealth. The central government decided to withdraw the legal tender status of INR 500 and INR 1,000 currency notes.
The primary objective of this move was to curb and eliminate the pervasiveness of illicit and counterfeit cash that was suspected of funding illegal activities, including terrorism. This strategy was designed to target the shadow economy by making the undisclosed income visible to regulatory authorities.
Global integration
In an increasingly interconnected world, trade is the cornerstone of growth. Strategic reforms aimed at trade liberalisation, the dismantling of trade barriers, and the negotiation of favourable trade agreements can invigorate exports and entice foreign investments.
Embracing global integration empowers Indian enterprises to tap into new markets and harness emerging technologies, fostering economic diversification and enhancing resilience in the face of challenges.
The diversity of India’s economic landscape is woven with threads of opportunity and challenge across its diverse sectors. The execution of economic reforms, guided by meticulous planning and strategic foresight, has the power to infuse life into this domain.
Each reform, whether it entails simplifying tax structures or nurturing innovation, contributes to a grander narrative of progress. As India marches steadfastly towards its aspiration of becoming a global economic powerhouse, these reforms serve as the scaffolding upon which this vision is built.
The journey towards economic prosperity is a multidimensional endeavour that demands a comprehensive approach. By championing reforms across taxation, entrepreneurship, infrastructure, business facilitation, finance, trade, and labour, India can forge a path that leads to sustained growth, increased competitiveness, and enhanced global relevance.