India might see huge reforms in the next 100 days under Modi 2.0, claims NITI Aayog. The reforms will include changes in labour laws, privatisation moves, and creation of land banks for new industrial development, said Rajiv Kumar, vice chairman of NITI Aayog (National Institute for Transforming India).
“They (foreign investors) will have reasons to be happy. You will see a slew of reforms I can assure you of that. We are going to pretty much hit the ground running,” Mr. Kumar told news agency Reuters in an interview.
PM Modi and his Bharatiya Janata Party (BJP) were last weeks declared landslide winners of the general election with an increased majority in the Lok Sabha.
Kumar said that the government will focus on fully privatizing or closing more than 42 state-controlled companies in the coming months. The government is even mulling lifting the foreign direct investment cap on Air India, the loss-making state-owned flagship carrier, to make it easier to sell.
India’s economic growth rate decelerated to a five-quarter low of 6.6% in the last three months of 2018 and is expected to fall further in the January-March quarter due to a sharp drop in consumption.
The economy needs far faster growth if it is to generate enough jobs for the millions of young people entering the labour market each month.
Kumar blamed the stressed balance sheet of banks and a crisis in the shadow lending industry for the recent drop in growth.
He suggested that the government should start with reforming the state-owned banking sector and also create more money for spending on infrastructure and new public housing through more and quicker privatisations and better tax collection.
“We should (start with the banks)..There will be big bang, there will be 100 days action. We are all geared for that … I have maintained that the fiscal policy should be counter cyclical. There is scope for that.”