The election season has come to an end. The public has given a clear verdict, and while it is in favor of BJP, it also reflects the public's answer to almost a decade of misgovernance leading to slowest GDP growth in the decade.
At the core of this wish list is the ease of doing business in the country and an effective taxation system. And if the Government is able to address these concerns, the benefit will flow down to the masses as well in the form of higher growth, lower inflation, better job creation etc.
One of the key sectors that need revival and an active Government intervention is the manufacturing sector. For a turn around in the manufacturing and other sectors, there are a lot of connected issues that need to be taken care such as labour laws, land acquisition laws etc. With limited supply of land, it will not be an easy task for the Government to balance the interests of the stakeholders where there is a conflict.
While the demand and growth potential in India is huge, the existing infrastructure is too small to support the existing population or any growth. Again, India has suffered in the past for not being very clear with its policies. Lack of clarity and communication has led to multiple interpretations of some of the key rules and policies leading to chaos and slowdown in investments. To have a strong foundation and stable growth, the country needs more investments. And for that, the Government needs to simplify complex procedures and to deal with bureaucratic delays.
Taxation is one of the key areas where India Inc looks forward to for a positive change. While it is quite an acknowledged issue, nothing significant has been done to improve the tax regime in the country. It is yet to be seen if the Government is able to deliver on fronts like roll out of Good & Services Tax.
While the BJP has won a decisive majority, it is time for the Government to work on decisive reforms. The Government will need a multi pronged approach such as the tax reforms, reducing wasteful subsidies, re-capitalization of PSU banks etc to ensure a stable recovery. We hope that the new government will live up to the high expectations of the people and bring in the much needed changes to revive the economy.
Do you think that the new government will be able meet the expectations of India Inc.? Let us know in the Equitymaster Club.