1Historic tax reform

The Goods and Services Tax (GST) came into effect across India from July 1, 2017. GST has turned all 36 states and union territories of India into one common market. By curbing cascading taxes, GST has also reduced the cost of local production. GST is expected to bring more businesses from the unorganised to the organised sector, thereby increasing efficiency and productivity and attracting more foreign direct investment (FDI).1

Paying taxes has become easier in India because of factors like the introduction of GST and digitisation of processes. A fact that is captured succinctly in the World Bank Doing Business Report 2018. India improved its ranking on the Paying Taxes indicator in the report by 53 places.


2Digitisation drive

Systems from taxation to incorporating a company are being moved online. For example, on October 2, 2016, the Ministry of Corporate Affairs (MCA) introduced a simplified electronic form called SPICe that makes it possible to incorporate a company in India in just one day1. In 2017, the Central Board of Direct Taxes tied up with the MCA to make Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) available in a day to businesses that register through the SPICe electronic form2.

A new online system has also streamlined the process for getting construction permits, reducing both the number of procedures and the time required to get a permit3. This last step has improved India's ranking on the Construction Permits indicator of the World Bank Doing Business Report.

Source 1, 2, 3

3New insolvency code

Enacted on May 28, 2016, the Insolvency and Bankruptcy Code 2016 consolidates all rules and laws relating to insolvency into a single legislation and brings India’s bankruptcy code on par with global standards1. The code is designed to promote entrepreneurship—it enables companies to tide over financial difficulties and opt for restructuring while still fulfilling orders. It also promotes greater confidence among investors and increases availability of credit, by strengthening procedures.

By October 2017, more than 2,050 insolvency applications had been filed before the National Company Law Tribunal and 112 applications had been admitted2. The code has helped India improve ease of doing business. India moved up 33 ranks in the Resolving Insolvency indicator of the World Bank’s Doing Business Report in 2017.

Source 1, 2

4Institutional reforms

A social revolution is brewing in India under the moniker JAM: Jan Dhan Yojana for financial inclusion, Aadhaar biometric identification and mobile telecommunications.

The Prime Minister’s Jan Dhan Yojana (PMJDY) is a financial inclusion programme that makes services like banking, remittance and insurance available to every Indian at affordable cost. Beneficiaries can open a zero-balance account. As of August 16, 2017, 295 million new bank accounts had been opened under the PMJDY. More than 176 million of these accounts are in rural India, and around 145 million are operated by women1.

Aadhaar is an ambitious biometric identification system. As of 2017, the Unique Identitification Authority of India had issued a unique 12-digit Aadhaar number to more than 1.19 billion Indians, covering 99.9% adults in the country2.

Mobile-phone adoption has been impressive in India by any standards. Already there are more than 1 billion mobile phone subscribers in India. Plans are underway to deploy 5G services for consumers as early as 2020.

Source 1, 2

5Radical changes in FDI policy regime

FDI liberalization in 87 policy areas across 21 sectors is paying off. On June 20, 2016, Government of India radically liberalized the FDI regime1. The objective was to increase FDI inflow, of course, but also provide major impetus to employment and job creation. Now, most of the sectors are under automatic approval route. Sectoral caps across major sectors including defence and aviation have been increased to 100%. With these changes, India is now one of the most open economies in the world for FDI. In 2017, India retained its position as the World #1 Greenfield FDI destination.


6Infrastructure push

Programmes to build infrastructure and connect India are picking up pace. New railway lines have been constructed in 2017 at an expenditure of Rs4,531.93 crore. A five-year plan to build 83,677 km of roads has begun. Of this ambitious target, the Bharatmala Pariyojana programme will account for 34,800km of roads and create 14.2 crore mandays of jobs in the process. The remaining 48,877km will be developed by the National Highway Authority of India and the Ministry of Road Transport and Highways1.

The Sagarmala Programme, on the other hand, focuses on connectivity by sea. It envisages a role for multiple central ministries and agencies as well as state governments to complete 415 projects in just 20 years till 2035. The projects are across port modernization, new port development, port connectivity enhancement, port-linked industrialization and coastal community development.2

India gained 19 places in the World Banks' Logistics Performance Index 2016 ranking, the latest figures available at the time of publication.

Source 1, 2

7Technology readiness

More than 100,000 Gram Panchayats or Village Councils now have access to high-speed broadband, thanks to Government of India's BharatNet project. BharatNet is probably the world's largest rural broadband project. As on December 31, 2017, 254,895 km of optical fibre cable had been laid across 109,926 Gram Panchayats as part of the project1. BharatNet is expected to make digital delivery of services for health, education, livelihood, skills training, e-agriculture and e-commerce available to the rural poor, in addition to generating massive employment opportunities.

Apart from BharatNet, India has more than 1 billion mobile phone subscriptions and 462 million Internet users. India improved its ranking on the Technology Readiness Pillar of the World Economic Forum's Global Competitiveness Index 2017 by three places.


8Renewable energy

India is World #4 in terms of installed capacity to harness power from wind, and World #6 in terms of installed solar power capacity. As of November 30, 2017, solar energy projects capable of producing 16611.73MW had been installed in the country. In 2016- 17, India exceeded its target for wind power capacity addition by 38%, taking the total installed capacity to 32746.87 MW1.

The Government of India has set an ambitious target to install 175 GW renewable power capacity by the end of 2022. This includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and 5 GW from small hydro power.