The best of the Indian economy is yet to come

The Modi government's stated goal of hitting a $5 trillion economy will require focus and effort, but the spirit of determination, innovation and enterprise across the country amply illustrates that the target is achievable.

Indian prime minister Narendra Modi's recent views that despite the ravages caused by the Covid-19 pandemic India was still on track to reach its stated goal of becoming a $5 trillion economy by 2024 is enough to send waves of optimism into all corners of business India.

There are currently, still a few hurdles that India will have to surmount, chief among which is to control and finally arrest the growing number of Covid-19 cases across the country and all things being equal after that the ship would steady itself and achieve the 2019-20 level of $2.7 trillion only by the end of 2021. The market still wears the cloak of occasional pessimism due to the pandemic and the domino effect it has created across industries and businesses affecting people's livelihood.

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If one does the math in these current circumstances then India would have to keep hitting a growth target of 22 percent annually to scale the $5 trillion peak. Given that the growth is supposed to be realized in dollar values, real growth of 12%, accompanied by rupee appreciation against the dollar by 10% a year, can achieve that. It is not impossible but the target cannot be overhauled without determination and the spirit of enterprise engulfing the whole country.

Spirit of self-reliance

But this is precisely where the face of a self-reliant India presents itself. The prime minister has looked into the future with remarkable foresight and has unveiled reform after reform to declare a statement of intent that India will and must prevail against all odds. He has created the platform from which growth can be achieved, of that there is no doubt. The application of principles from hereon is important. The country is not just facing the effects of the pandemic alone, it is fighting off aggression created by China on its borders, which also is designed to have an impact on the economy, and making a statement of intent in the region and beyond that as a responsible global entity by assisting all other nations who require its help.

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But back to the reforms - they are the stepping stone to future stability and a key driver for the success of the Indian economy. No sector has been spared from the government's attention, the Make in India program being the highlight that showcases the spirit of enterprise across the country.

Archaic labour laws overhauled

In a significant display of statesmanship in parliament the government has restructured four new labour codes, approved by the houses, that have released India from the archaic labour laws of the past, addressing the essential concerns of foreign investors who have been fascinated, but at the same time tentative, to do business with India. Foreign Direct Investment laws have been alleviated and companies invited to be a part of India's successful journey into self-sufficiency and prosperity.

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There have been significant developments in the farming and labour sectors with agricultural India enticing private domestic and overseas involvement. Rural India has authored its own renaissance forcing corporate entities, both domestic and foreign, to train their eyes on the starring role played by the farmer. The same can be said of the MSMEs and start-ups. Technology has become the buzzword which is driving the engines of the country and here too global entities have lined up to be a part of the success story.

Corporate tax cut entices investors

The slashing of previously high corporate tax rates by finance minister Nirmala Sitharaman - from 34 per cent to 25.17 per cent inclusive of surcharge and cess - is being seen as a statement of intent by the government that it is ready to do business. This is significant given that with one stroke of the pen tax rates were reduced to allow India to become competitive with other nations in South and South East Asia and it has evinced the interest of companies looking to de-risk their supply chains from their current over-reliance on China.

The space has been cleared for the private sector to swarm into all facets of the economy - space, atomic energy, commercial coal mining, defence etc - which had been zealously guarded by previous governments.

It is quite evident that the prime minister has used his first term in office to create the platforms from which could launch its ambitious economic programmes. Having won an overwhelming majority for a second term Modi has exposed the full potential of India to the world and that too against the back drop of pandemic. It is no longer a matter of just reaching out for the low hanging fruit. The best of India is yet to come.