Bharat would go through a period of change in the next 25 years. The Prime Minister has dubbed this period “Amrit Kaal,” during which the country hopes to completely connect all of its 6 lakh villages with roads, provide everyone with access to a formal banking system, and ensure that everyone has access to clean energy and fuel. The focus will be on decentralizing governance and digitizing services throughout this time. It is anticipated that by 2047, Bharat would have the third-largest economy and rank among the most advanced industrial societies. But what part can the government, business community, and Bharat Inc. play in making the Amrit Kaal a reality?
The freebies discussion in the recent past has highlighted the necessity for a body that monitors the fiscal excesses of the Union government and individual states. Giving away free things may be a politically appealing technique, but it has negative economic effects and alters the business climate in the region. According to RBI’s Annual State Finances Report 2021–2022, the 2020 pandemic significantly altered the fiscal landscape as GFD reached 4.7% in FY21 and was anticipated to be 3.7% in FY22. The GFD has increased as a result of lower federal transfers and falling growth in state taxes. It is interesting to note the significant association between infrastructure investment, growth, and taxation. Governments in leading investment-friendly states like Gujarat, Karnataka, Maharashtra, and Tamil Nadu have continuously cut back on extravagant expenditures and enacted important market reforms.
For instance, the Karnataka Startup Policy plans to provide seed money to registered start-ups in the form of a one-time grant of up to Rs. 50 lakhs. For a period of three years, the Maharashtra State Innovative Start-up Policy would grant 1 lakh to every Startup to help with the filing of patents, trademarks, and designs. Establishing New Age Incubation Centres, cultivating R&D, marketing and promotional assistance, encouraging product design and innovation, and assuring legal, technical, and research support are all important steps that have been taken. As Bharat’s urban environment continues to be dominated by metropolises like Mumbai, Bengaluru, Delhi, Kolkata, Hyderabad, Pune, and Chennai, tier 2 and tier 3 cities have emerged as the center of the country’s consumer culture.
As a result, the country has witnessed an astonishing improvement in the Ease of Doing Business ranking. For instance, obtaining an electrical connection for a business just requires four procedures and 53 days. If no Right of Way (RoW) is needed, an electricity connection is given in 7 days; if RoW is needed, it is provided in 15 days. Insolvency resolution in Bharat has expanded thanks to the Insolvency and Bankruptcy Code of 2016. Corporation Tax in Bharat is one of the lowest in the world. It has proved to be a true game-changer. And numerous measures like the above taken by the Union and State governments, respectively, have improved the business-friendly profile of Bharat.
But there are still challenges. Obtaining permits for construction is an expensive and time-consuming process. To receive all the NOCs, 34 procedures must be completed which could take up to 196 days. Despite the IBC’s existence, the average time to resolve insolvency is 4.3 years. Smaller companies struggle to comply with GST regulations, and many of them have neglected to file returns. High-interest payments of the States also reduce the amount of revenue that the state invests in infrastructure. The requirement of collaboration between the government, business community, and Bharat Inc. in the Amrit Kaal, therefore becomes necessary.
In this round table discussion crucial issues like the necessity of establishing a fiscal council, managing the fiscal deficit, enhancing market access, and the fulfillment of governance needs like health, education, etc. will be taken for discussion.