New Delhi: The Economic Survey 2022-23 Tuesday recommended “entirely” dismantling the licensing, inspection and compliance regime, and a host of other reforms to accelerate economic growth to sustained higher levels.
The Survey tabled in Parliament by Finance Minister Nirmala Sitharaman said the reforms undertaken before 2014 primarily catered to product and capital market space.
“They were necessary and continued post-2014 as well,” it said.
The government, however, imparted a new dimension to these reforms in the last eight years.
“With an underlying emphasis on enhancing the ease of living and doing business and improving economic efficiency, the reforms are well placed to lift the economy’s potential growth,” it said while listing out reforms undertaken by the Modi government since 2014.
The Survey has been authored by a team lead by Chief Economic Adviser V Anantha Nageswaran.
It said that while the new age reforms undertaken over the last eight years form the foundation of a resilient, partnership-based governance ecosystem and restore the ability of the economy to grow healthily, further reforms are needed to ensure that economic growth can both accelerate and be sustained at higher levels, to deliver a better quality of life.
“The deregulation and simplification of compliances should continue to dismantle the licensing, inspection and compliance regime entirely,” it said.
Further, state governments have to address power sector issues, and the financial viability concerns of the Discoms have to be addressed.
Impetus must be given to education and skilling to match the requirements of modern industry and technologies, deal with twenty-first-century challenges such as climate change and energy transition, and make the most of India’s demographic dividend.
“Initiatives to sensitise the population towards a healthy lifestyle should be continued. Strategies to arrest and reverse the rising obesity levels should be adopted,” the survey added.
Other reforms suggested, include long-range plans to secure the necessary metals and minerals required for energy transition and diversification, and public sector asset monetisation.
It also underlined reforms to reduce the compliance burden on MSMEs, enhance their access to finance and working capital and equip them with skills, knowledge and attitude to grow their businesses responsibly must continue.
If the other reforms are pursued in the coming years, “India’s potential GDP growth can rise to 7-8 per cent per annum in the medium term”, said the survey.
The 414-page document notes that the years of structural reforms had prepared the Indian economy to contribute to global growth and also benefit from it.
While the global growth averaged 4.8 per cent during 2003-2008, the Indian economy grew at more than 8 per cent on average.
It said the economic growth during the period was supported by strong capital inflows, which indicated favourable domestic and external factors.
Some of these included sustained momentum in domestic economic activity, better corporate performance, a conducive investment climate, positive sentiments for India as a preferred investment destination, and encouraging global liquidity conditions/ interest rates.
“This combination of structural economic reforms with their lagged effect on economic growth has parallels to what is unfolding in the Indian economy presently,” it said.
The survey said 2014-2022 is an important period in the economic history of India. The economy underwent a gamut of wide-ranging structural and governance reforms that strengthened the economy’s fundamentals by enhancing its overall efficiency.
With an underlying emphasis on improving the ease of living and doing business, the reforms were based on the broad principles of creating public goods, adopting trust-based governance, co-partnering with the private sector for development, and improving agricultural productivity.
Under normal circumstances, reforms of such scale and relevance would have accelerated economic growth, it added.
PTI