Economic Reforms Current Affairs - 2020

Budget 2020-21 presented by Finance Minister: The Themes, GST Reforms

The Finance Minister Nirmala Sitaraman presented the Budget 2020-21 on February 1, 2020. The budget focused on enhancing purchasing power of citizens and boosting their incomes. It has also given importance to technology and innovation to increase employment of the youths.

The Budget 2020 has been framed on two main pillars namely Fundamental Structural Reforms and Inclusive Growth.

Structural Reforms

The structural reforms include recapitalization of banks through IBC (Insolvency and Bankruptcy Code). The debt of the country has been reduced from 52.2% of GDP in 2014 to 48.7% of GDP in 2019.

GST Reforms
  • Under GST, an average household saves 4% of its savings.
  • In the year 2019-20, 60 lakh new tax payers were added, 40 crores of returns filed, 800 crore invoices uploaded and 105 e-way bills have been generated. GST helped to reducing the turnaround time for trucks by 20%.
  • The Inspector Raj system has been vanished. Under this, the state and national permits including road tax, fitness certificate pollution certificate for trucks were removed.

Inclusive Growth

The Growth Rate was 4% in 1950s, 6% in 1980s and reached an average of 7.4% in 2016. The inflation for the period 2014-19 stood at 4.5%. Around 271 million people were brought out of poverty in 2006-16.

The Budget was presented on three themes.

Themes of the budget

The themes were

  • Aspirational India-Better standards for all sections of the society in terms of Health, Education and better jobs
  • Economic Development-Entails reforms across the economy by creating more space for the private sector
  • Caring Society.

Under Aspiration India the budget covered

  • Agriculture, Irrigation, Rural Development
  • Education
  • Water and Sanitation

Under Economic Development, the manufacturing sector, industries and skill development were focused. Under the Caring Society section, tourism, connectivity, vulnerable and old population were focused.

World Bank’s Ease of Doing Business

India was raked 63rd in World Bank’s Ease of Doing Business ranking released on October 24, 2019. The ranking comes when the leading financing institutions including RBI, World Bank and IMF are slashing country’s growth forecasts. In 2014, India was ranked 142 among 190 countries. As compared to 2018, India moved up 14 places in the ranking mainly due to several reforms in the trade and commerce sector.

Highlights

  • India for the third time in a row was among the top 10 performers on the list.
  • The other top 10 performers other than India were Saudi Arabia at rank 62, Togo in the African continent at rank 97, Jordan (75), Tajikistan, Pakistan at rank 108, Kuwait (83), China (31) and Nigeria (131)
  • In 2015, India set a goal to join top 50 economies on ease of doing business ranking by 2020.
  • The experts believe that resolving insolvency with the Bankruptcy law, tax reforms, trading across borders, initiatives like Make in India are the major reasons for the leap in the rank

Ease of Doing Business

The ranking is framed based on 10 indices. It includes starting a business, registering a property, dealing with construction permits, getting credit, paying taxes, enforcing contracts, trading across borders, protecting investors, etc. The first set of ranking was prepared by the world Bank in 2003.