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Modi government will now stay away from economic reforms, decision to withdraw agricultural laws indicated: report

Prime Minister Narendra Modi’s decision to withdraw controversial agriculture laws shows that economic reforms have lagged behind in priority as the second half of his term begins. This is said in the Bloomberg report.

Prime Minister Narendra Modi’s decision to withdraw controversial agriculture laws shows that economic reforms have lagged behind in priority as the second half of his term begins. (File Pic)

Prime Minister Narendra Modi’s decision to withdraw controversial agriculture laws shows that economic reforms have lagged behind in priority as the second half of his term begins. This is said in the Bloomberg report. According to the report, due to elections in several states next year, it seems that the government wants to implement popular policies, as Modi wants to come to power for the third time. This would make him the longest-serving prime minister after Jawaharlal Nehru and Indira Gandhi.

According to the report, Shumita Deveshwar, senior director of India Research at TS Lombard, said the rollback of agricultural reforms shows that there are limits on how far the Modi government can go ahead with reforms despite a strong majority in Parliament. He further said that he clearly wants to save his political power.

Many economic challenges before the Modi government

According to Bloomberg, the first of the challenges that the Modi government will face before 2024 is the ease of doing business. Where corporate tax in India is one of the lowest in Asia. At the same time, Modi needs to persuade investors, who have stayed away because of poor infrastructure and red tape. Of the 1,680 major infrastructure projects, ranging from highways to railroads and power plants, a third have been delayed due to cost overruns of around 20 per cent.

According to the report, about 75 per cent of the companies in the country said they had lost business opportunities because they failed to meet at least one of India’s complex compliance regulations. Giants like General Motors Co. have lost $1.1 billion and are unable to exit completely due to political and legal concerns.

Inflation also a big concern: Report

Apart from this, inflation is also a concern. Higher prices are hurting the margins of the company and giving problems to the customers. While India is recovering at the fastest rate among the major economies this year, Modi needs to focus on improving the tax to GDP ratio and creating jobs to sustain growth. This means that the manufacturing base has to be increased in India, where 10 million people enter the market every year.

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Shehnaz Ali
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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