India, after gaining independence in 1947 from British rule, has evolved into the world's largest democracy. What was once labeled a "third-world country" has now emerged as a global economic powerhouse. Notable milestones in India's economic journey unfolded during the crisis years of 1966, 1981, and 1991. Yet, India's impressive rebound led to its distinction as the fastest-growing major economy worldwide.

Substantial reforms and policies propelled this remarkable economic trajectory, transforming not only the nation's financial landscape but also facilitating its remarkable growth.

Diving deeper, let's explore some significant economic reforms that successive governments have undertaken in recent decades, shaping India's economic landscape and setting it on a path of unprecedented growth.

Transforming India's Telecommunications

Around 1992–93, India's telecommunications sector initiated a transformative trajectory, characterized by the privatization of value-added services. A pivotal shift arrived in 1994 with the introduction of the National Telecom Policy (NTP), heralding competition in basic telecom and mobile services.

The 1990s witnessed escalating demand for telephones, nudging India toward embracing private participation as part of the liberalization-privatization-globalization agenda.

Moreover, the separation of the Department of Telecom (DoT) from the Indian Post and Telecommunication Department transpired as a significant development in 1985. Entities such as Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) emerged independently from the DoT's umbrella.

&nbsp;In the realm of mobile telephony, the Telecom Regulatory Authority of India (TRAI) facilitated market-driven mobile pricing while retaining regulatory oversight against unjust practices. August 15, 2000, marked the entry of unlimited competition for domestic long-distance telecommunications services. The year 2000's budget witnessed a reduction in import tariffs on mobile devices from 25 percent to 5 percent. The monopoly of Videsh Sanchar Nigam Ltd. over international telecommunications concluded on April 1, 2002.

Presently, India's telecom industry boasts a staggering 1.17 billion users, achieving a national tele-density of 84.86 percent. Remarkably, it ranks third in attracting foreign direct investment (FDI), directly employing 2.2 million individuals and indirectly supporting an additional 1.8 million.

The past decade has witnessed a surge of 500 million smartphone users. Predictions estimate a total of 850 million users by 2026, encompassing 55 percent of the population. India's trajectory to becoming the world's second-largest smartphone market by 2025 is unmistakable, as indicated by the GSM Association (GSMA).

Furthermore, in 2022, the Ministry of Communications unveiled the draft of the Indian Telecommunication Bill, which addresses sector achievements and challenges, affirming the government's commitment to a thriving telecommunications landscape.

Empowering India's capital market: Securities and Exchange Board of India (SEBI)

The journey of the Securities and Exchange Board of India (SEBI) commenced with a significant stride in 1988, as Prime Minister Rajeev Gandhi announced the establishment of a distinct regulatory body for the stock exchange and securities industry. Under the guidance of S. S. Nadkarni, IDBI recommended S. A. Dave, an executive director, to helm the newly formed regulator. Dave assumed the role in April 1988, operating initially from IDBI's Mumbai headquarters.

SEBI was initially established as a statutory body to oversee the securities market, gaining autonomy on January 30, 1992. This move endowed it with statutory powers that fortified its regulatory control over the financial market. Before SEBI's advent, the Controller of Capital Issues administered the capital market under the Capital Issues (Control) Act, 1947.

SEBI's impact on India's capital market has been profound. The introduction of an electronic trading system and the creation of a robust market surveillance mechanism stand as pivotal milestones that underscore its commitment to transparency and efficiency.

Nevertheless, SEBI encountered considerable challenges on its journey. Notably, its efficacy in curbing fraudulent activities, such as insider trading, faced scrutiny. Instances like the Satyam affair, the NSEL scam, and the Punjab National Bank case highlighted the regulatory constraints of SEBI in market oversight.

&nbsp;Moreover, SEBI faced criticism for its sluggishness in addressing corporate violations. The IL&amp;FS crisis serves as a prime illustration, wherein the infrastructure finance corporation grappled with financial upheaval for years before its collapse in 2018.

Fostering economic growth: Special Economic Zones (SEZ)

The inception of Special Economic Zones (SEZs) in 2000 primarily aimed to attract foreign investments and establish a globally competitive and seamless export environment. Subsequently, on February 10, 2006, the SEZ Act 2005 and accompanying SEZ Rules came into effect.

To incentivize businesses to operate within SEZs, the government extended benefits such as duty-free imports or local sourcing of materials essential for setting up, operating, and maintaining SEZ units.

The SEZ initiative has demonstrated its merits for the nation, evident in the impressive surge of exports from Rs. 22,840 crore in 2005–06 to Rs. 7,59,524 crore in 2020–21, along with a rise in investments from Rs. 4,035.51 crore in 2005–06 to Rs. 6,17,499 crore in 2020–21.

However, the trade ministry's recent research highlights two factors that impede the envisioned success of SEZs. These factors pertain to incentives provided under the foreign trade policy to exporters outside SEZs and disadvantages arising from free-trade agreements (FTA), both of which have impacted the SEZ program.

Furthermore, the exclusion of SEZs from the country's domestic tariff zone grants them the advantage of duty-free access to manufacturing inputs. However, India's free-trade agreements with nations that have eliminated or substantially reduced taxes on various items have compromised this advantage.

Revolutionizing welfare assistance: JAM Trinity&nbsp;

The JAM Trinity, encompassing Jan Dhan-Aadhaar-Mobile, was introduced during the economic survey of 2014–2015. Its primary objective is to interlink bank accounts, mobile phones, and Aadhaar cards to prevent the leakage of subsidies.

The government's intent behind this initiative was to extend assistance to the less privileged. Despite the operation of the Direct Benefits Transfer (DBT) since 2013, the Trinity streamlines the process of identifying and tackling the remaining challenges within each component.

Furthermore, JAM has enhanced the distribution of LPG subsidies by connecting Aadhaar-linked bank accounts and gas connections, significantly curtailing fund losses and fortifying the government's financial capability.

Consequently, dormant funds have dwindled, leading to smoother transactions. Since the introduction of Jan Dhan Yojana up until August 2017, the initiative has contributed to an increase of over Rs. 65,000 crores in the economy, further elevating the gold holdings to financial savings ratio.

Nevertheless, the JAM Trinity encounters certain hurdles, particularly in addressing inactive Jan Dhan accounts and bridging the conspicuous digital divide across the country.

Harmonizing taxation: Goods and Services Tax (GST)

The introduction of the Goods and Services Tax (GST) on July 1st, 2017, aimed to establish a unified tax structure across India. Previously, taxpayers navigated through a maze of indirect taxes for various transactions such as purchases, sales, manufacturing, retailing, and marketing. These included value-added tax (VAT), excise duty, service tax, central sales tax, entertainment tax, luxury tax, and sales tax.

The GST implementation had both positive and negative consequences for the Indian economy. The primary aim was to simplify the intricate tax landscape by eliminating cascading tax effects. Additionally, it aimed to expand the taxpayer base, foster a corruption-free environment, and reduce instances of tax evasion.

However, GST encountered criticism for its complex structure and varying interpretations across states. Furthermore, there is a call for GST to encompass all sectors, including petroleum products currently exempt from the tax. Bringing petroleum products under the GST ambit could yield significant benefits, enhancing flexibility and reducing costs.

WATCH WION LIVE HERE

<iframe allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="350" src="https://www.wionews.com/live-tv/embed?autoplay=1&amp;mute=1" width="100%"></iframe>

India, after gaining independence in 1947 from British rule, has evolved into the world's largest democracy. What was once labeled a "third-world country" has now emerged as a global economic powerhouse.

India, after gaining independence in 1947 from British rule, has evolved into the world's largest democracy. What was once labeled a "third-world country" has now emerged as a global economic powerhouse. Notable milestones in India's economic journey unfolded during the crisis years of 1966, 1981, and 1991. Yet, India's impressive rebound led to its distinction as the fastest-growing major economy worldwide. Substantial reforms and policies propelled this remarkable economic trajectory, transforming not only the nation's financial landscape but also facilitating its remarkable growth. Diving deeper, let's explore some significant economic reforms that successive governments have undertaken in recent decades, shaping India's economic landscape and setting it on a path of unprecedented growth. Transforming India's Telecommunications Around 1992–93, India's telecommunications sector initiated a transformative trajectory, characterized by the privatization of value-added services. A pivotal shift arrived in 1994 with the introduction of the National Telecom Policy (NTP), heralding competition in basic telecom and mobile services. The 1990s witnessed escalating demand for telephones, nudging India toward embracing private participation as part of the liberalization-privatization-globalization agenda. Moreover, the separation of the Department of Telecom (DoT) from the Indian Post and Telecommunication Department transpired as a significant development in 1985. Entities such as Mahanagar Telephone Nigam Limited (MTNL) and Videsh Sanchar Nigam Limited (VSNL) emerged independently from the DoT's umbrella. In the realm of mobile telephony, the Telecom Regulatory Authority of India (TRAI) facilitated market-driven mobile pricing while retaining regulatory oversight against unjust practices. August 15, 2000, marked the entry of unlimited competition for domestic long-distance telecommunications services. The year 2000's budget witnessed a reduction in import tariffs on mobile devices from 25 percent to 5 percent. The monopoly of Videsh Sanchar Nigam Ltd. over international telecommunications concluded on April 1, 2002. Presently, India's telecom industry boasts a staggering 1.17 billion users, achieving a national tele-density of 84.86 percent. Remarkably, it ranks third in attracting foreign direct investment (FDI), directly employing 2.2 million individuals and indirectly supporting an additional 1.8 million. The past decade has witnessed a surge of 500 million smartphone users. Predictions estimate a total of 850 million users by 2026, encompassing 55 percent of the population. India's trajectory to becoming the world's second-largest smartphone market by 2025 is unmistakable, as indicated by the GSM Association (GSMA). Furthermore, in 2022, the Ministry of Communications unveiled the draft of the Indian Telecommunication Bill, which addresses sector achievements and challenges, affirming the government's commitment to a thriving telecommunications landscape. Empowering India's capital market: Securities and Exchange Board of India (SEBI) The journey of the Securities and Exchange Board of India (SEBI) commenced with a significant stride in 1988, as Prime Minister Rajeev Gandhi announced the establishment of a distinct regulatory body for the stock exchange and securities industry. Under the guidance of S. S. Nadkarni, IDBI recommended S. A. Dave, an executive director, to helm the newly formed regulator. Dave assumed the role in April 1988, operating initially from IDBI's Mumbai headquarters. SEBI was initially established as a statutory body to oversee the securities market, gaining autonomy on January 30, 1992. This move endowed it with statutory powers that fortified its regulatory control over the financial market. Before SEBI's advent, the Controller of Capital Issues administered the capital market under the Capital Issues (Control) Act, 1947. SEBI's impact on India's capital market has been profound. The introduction of an electronic trading system and the creation of a robust market surveillance mechanism stand as pivotal milestones that underscore its commitment to transparency and efficiency. Nevertheless, SEBI encountered considerable challenges on its journey. Notably, its efficacy in curbing fraudulent activities, such as insider trading, faced scrutiny. Instances like the Satyam affair, the NSEL scam, and the Punjab National Bank case highlighted the regulatory constraints of SEBI in market oversight. Moreover, SEBI faced criticism for its sluggishness in addressing corporate violations. The IL&FS crisis serves as a prime illustration, wherein the infrastructure finance corporation grappled with financial upheaval for years before its collapse in 2018. Fostering economic growth: Special Economic Zones (SEZ) The inception of Special Economic Zones (SEZs) in 2000 primarily aimed to attract foreign investments and establish a globally competitive and seamless export environment. Subsequently, on February 10, 2006, the SEZ Act 2005 and accompanying SEZ Rules came into effect. To incentivize businesses to operate within SEZs, the government extended benefits such as duty-free imports or local sourcing of materials essential for setting up, operating, and maintaining SEZ units. The SEZ initiative has demonstrated its merits for the nation, evident in the impressive surge of exports from Rs. 22,840 crore in 2005–06 to Rs. 7,59,524 crore in 2020–21, along with a rise in investments from Rs. 4,035.51 crore in 2005–06 to Rs. 6,17,499 crore in 2020–21. However, the trade ministry's recent research highlights two factors that impede the envisioned success of SEZs. These factors pertain to incentives provided under the foreign trade policy to exporters outside SEZs and disadvantages arising from free-trade agreements (FTA), both of which have impacted the SEZ program. Furthermore, the exclusion of SEZs from the country's domestic tariff zone grants them the advantage of duty-free access to manufacturing inputs. However, India's free-trade agreements with nations that have eliminated or substantially reduced taxes on various items have compromised this advantage. Revolutionizing welfare assistance: JAM Trinity The JAM Trinity, encompassing Jan Dhan-Aadhaar-Mobile, was introduced during the economic survey of 2014–2015. Its primary objective is to interlink bank accounts, mobile phones, and Aadhaar cards to prevent the leakage of subsidies. The government's intent behind this initiative was to extend assistance to the less privileged. Despite the operation of the Direct Benefits Transfer (DBT) since 2013, the Trinity streamlines the process of identifying and tackling the remaining challenges within each component. Furthermore, JAM has enhanced the distribution of LPG subsidies by connecting Aadhaar-linked bank accounts and gas connections, significantly curtailing fund losses and fortifying the government's financial capability. Consequently, dormant funds have dwindled, leading to smoother transactions. Since the introduction of Jan Dhan Yojana up until August 2017, the initiative has contributed to an increase of over Rs. 65,000 crores in the economy, further elevating the gold holdings to financial savings ratio. Nevertheless, the JAM Trinity encounters certain hurdles, particularly in addressing inactive Jan Dhan accounts and bridging the conspicuous digital divide across the country. Harmonizing taxation: Goods and Services Tax (GST) The introduction of the Goods and Services Tax (GST) on July 1st, 2017, aimed to establish a unified tax structure across India. Previously, taxpayers navigated through a maze of indirect taxes for various transactions such as purchases, sales, manufacturing, retailing, and marketing. These included value-added tax (VAT), excise duty, service tax, central sales tax, entertainment tax, luxury tax, and sales tax. The GST implementation had both positive and negative consequences for the Indian economy. The primary aim was to simplify the intricate tax landscape by eliminating cascading tax effects. Additionally, it aimed to expand the taxpayer base, foster a corruption-free environment, and reduce instances of tax evasion. However, GST encountered criticism for its complex structure and varying interpretations across states. Furthermore, there is a call for GST to encompass all sectors, including petroleum products currently exempt from the tax. Bringing petroleum products under the GST ambit could yield significant benefits, enhancing flexibility and reducing costs. WATCH WION LIVE HERE

India's economic metamorphosis: Reforms and triumphs

The Bank of England looks ready to cut interest rates for the first time since 2009 on Thursday, seeking to stop Britain&#39;s vote to leave the European Union from kicking the country into recession. 
 
It may even go a step further and pump billions of pounds into financial markets. 
 
Economic surveys have pointed to a sharp slowdown since the BoE wrong footed markets just over two weeks back, when it kept rates on hold while it considered a bigger, unspecified package of stimulus, which policymakers said was likely in August. 
 
Manufacturing figures on Monday showed the most widespread downturn since early 2013. Earlier survey data for the much larger services sector pointed to the sharpest contraction since 2009. 
 
There is a chance these reports reflect a knee-jerk reaction to the vote, so the question the BoE faces this week is how aggressively to react. 
 
BoE chief economist Andy Haldane said he wanted to use &quot;a sledgehammer to crack a nut&quot;, but another policymaker, Kristin Forbes, said the central bank should stay calm and not rush into a decision until more hard data was available. 
 
Most economists polled by Reuters expect the BoE to cut interest rates by at least a quarter percentage point to 0.25 per cent, and almost half say it will restart its quantitative easing bond purchase programme, on hold since late 2012. 
 
&quot;If you&#39;re heading towards a waterfall, it is better to start paddling than to wait until you&#39;re at the edge,&quot; said Bank of America Merrill Lynch economist Robert Wood, who previously worked as a BoE forecaster. 
 
Wood said looser monetary policy would take months to help the economy. He predicts the BoE will announce 50 billion pounds of asset purchases on top of the 375 billion of government bonds bought between 2009 and 2012. 
 
Others say the BoE&#39;s Monetary Policy Committee (MPC) might be concerned more QE at a time of record-low global bond yields could have unpredictable consequences for banks and markets. 
 
&quot;Taken at face value, recent survey data point to a significant recession. However, there may be some element of a knee-jerk reaction and the MPC may wish to wait for more data before making such a big call,&quot; HSBC economist Simon Wells said. 
 
Surveys carried out in the first half of July may reflect the temporary political disarray as David Cameron stepped down as prime minister and the Conservative Party hunted for a successor. Some data, including the BoE&#39;s own in-house research, point to a fairly modest reaction to the referendum. 
 
Divided MPC 
 
BoE Governor Mark Carney will present the policy decision in a news conference, but is unlikely to have the full support of the MPC. 
 
Forbes, a US academic who serves as an external member of the rate-setting body, said last month looser monetary policy had costs as well as benefits, and the BoE should wait for better data to calibrate its response. 
 
The effectiveness of rate cuts and asset purchases is also in doubt at a time when 10-year British government borrowing costs GB10YT=RR have already hit a record low 0.7 per cent. 
 
&quot;At this stage monetary policy is almost out of juice,&quot; Bank of America&#39;s Wood said. Ultimately the government was likely to need to spend more or cut taxes to boost the economy, he added. 
 
HSBC&#39;s Wells also a former BoE staffer said it was probably too soon for Carney to say the BoE would act like the Bank of Japan and buy bonds in support of a fiscal stimulus which Britain&#39;s government has only hinted at so far. 
 
&quot;Although the BoE may tease us with these ideas ... (this) poses significant policy risks for the future and potentially undermines the BoE&#39;s operational independence,&quot; Wells said. 
 
More likely is for the BoE to extend its Funding for Lending Scheme, which offers banks cheap finance in return for higher lending to the private sector and was in the process of being phased out as the economy recovered. 
 
Other measures are also possible to ensure lower interest rates do not hurt financial institutions&#39; incentives to lend. 
 
The BoE will also release a quarterly update to its growth and inflation forecasts. Sterling&#39;s 12 per cent fall since the referendum is likely to trigger a forecast that inflation will exceed its 2 percent target next year as imports become more costly. 
 
Growth is certain to be revised down, with the main question whether the central bank forecasts a recession. Before the referendum, Carney said a material slowdown, not a recession, was his central scenario if Britain voted to leave. 
 
(Reuters) 
&nbsp;

The Bank of England unlikely to have the full support of Monetary Policy Committee when it will present its policy decision

The Bank of England looks ready to cut interest rates for the first time since 2009 on Thursday, seeking to stop Britain's vote to leave the European Union from kicking the country into recession. It may even go a step further and pump billions of pounds into financial markets. Economic surveys have pointed to a sharp slowdown since the BoE wrong footed markets just over two weeks back, when it kept rates on hold while it considered a bigger, unspecified package of stimulus, which policymakers said was likely in August. Manufacturing figures on Monday showed the most widespread downturn since early 2013. Earlier survey data for the much larger services sector pointed to the sharpest contraction since 2009. There is a chance these reports reflect a knee-jerk reaction to the vote, so the question the BoE faces this week is how aggressively to react. BoE chief economist Andy Haldane said he wanted to use "a sledgehammer to crack a nut", but another policymaker, Kristin Forbes, said the central bank should stay calm and not rush into a decision until more hard data was available. Most economists polled by Reuters expect the BoE to cut interest rates by at least a quarter percentage point to 0.25 per cent, and almost half say it will restart its quantitative easing bond purchase programme, on hold since late 2012. "If you're heading towards a waterfall, it is better to start paddling than to wait until you're at the edge," said Bank of America Merrill Lynch economist Robert Wood, who previously worked as a BoE forecaster. Wood said looser monetary policy would take months to help the economy. He predicts the BoE will announce 50 billion pounds of asset purchases on top of the 375 billion of government bonds bought between 2009 and 2012. Others say the BoE's Monetary Policy Committee (MPC) might be concerned more QE at a time of record-low global bond yields could have unpredictable consequences for banks and markets. "Taken at face value, recent survey data point to a significant recession. However, there may be some element of a knee-jerk reaction and the MPC may wish to wait for more data before making such a big call," HSBC economist Simon Wells said. Surveys carried out in the first half of July may reflect the temporary political disarray as David Cameron stepped down as prime minister and the Conservative Party hunted for a successor. Some data, including the BoE's own in-house research, point to a fairly modest reaction to the referendum. Divided MPC BoE Governor Mark Carney will present the policy decision in a news conference, but is unlikely to have the full support of the MPC. Forbes, a US academic who serves as an external member of the rate-setting body, said last month looser monetary policy had costs as well as benefits, and the BoE should wait for better data to calibrate its response. The effectiveness of rate cuts and asset purchases is also in doubt at a time when 10-year British government borrowing costs GB10YT=RR have already hit a record low 0.7 per cent. "At this stage monetary policy is almost out of juice," Bank of America's Wood said. Ultimately the government was likely to need to spend more or cut taxes to boost the economy, he added. HSBC's Wells also a former BoE staffer said it was probably too soon for Carney to say the BoE would act like the Bank of Japan and buy bonds in support of a fiscal stimulus which Britain's government has only hinted at so far. "Although the BoE may tease us with these ideas ... (this) poses significant policy risks for the future and potentially undermines the BoE's operational independence," Wells said. More likely is for the BoE to extend its Funding for Lending Scheme, which offers banks cheap finance in return for higher lending to the private sector and was in the process of being phased out as the economy recovered. Other measures are also possible to ensure lower interest rates do not hurt financial institutions' incentives to lend. The BoE will also release a quarterly update to its growth and inflation forecasts. Sterling's 12 per cent fall since the referendum is likely to trigger a forecast that inflation will exceed its 2 percent target next year as imports become more costly. Growth is certain to be revised down, with the main question whether the central bank forecasts a recession. Before the referendum, Carney said a material slowdown, not a recession, was his central scenario if Britain voted to leave. (Reuters)

Bank of England prepares to cut interest rates

policy-decision

Policy Decision, News on Policy Decision, stories on Policy Decision, articles on Policy Decision, Policy Decision stories at Wion, Policy Decision news, Policy Decision latest news