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Task force to drive reforms blueprint
There will be immediate reforms in the existing mechanism/institutions and those to be implemented in the next five years or so, said an official.
While the initial steps will be recommended by the task force over the next few weeks, it will have a longer window to firm up the other proposals to be implemented over years.
The broader set of reforms of factors of production will extend across sectors, and cover both manufacturing and services. These would aim at improving investment efficiency, reducing costs of businesses, and promoting ease of doing business.
The Task Force will submit its initial report in a time bound manner to the Prime Minister’s Office (PMO), which will take the final call on the recommendations, sources said. “The Task Force will identify issues and push through various government departments to get them done,” a senior official said.
The reforms are necessitated in the wake of certain structural infirmities exhibited by the economy in the form of lower household savings and higher household indebtedness. Even in this scenario, household spending rose 12% on year in FY25, as against historical average of 6.4%. A good part of the household expenditure is being employed for asset creation, the official said, allaying the concerns over debt-driven spending on consumption.
Correcting GST and easing compliance
By the redesign of the GST, the Centre intends to correct the structural problems haunting the tax. What is being planned is a comprehensive recast of the tax and its administration, which extends beyond rates rationalisation, and correcting duty inversions. Compliance process is being made easier, officials said.
Announcing the task force, Modi said it will evaluate all current laws, rules, and procedures related to economic activities. The Task Force will work within a set timeline to: reduce compliance costs for startups, MSMEs, and entrepreneurs, provide freedom from fear of arbitrary legal actions and ensure laws are streamlined for ease of doing business. These reforms are aimed at creating a supportive ecosystem for innovation, entrepreneurship, and economic growth, Modi said.
Sources said there will be reforms which are immediate in the existing mechanism/institutions and reforms to be in the next five years or so.
Over the past years, the government has abolished over 40,000 unnecessary compliances and repealed more than 1,500 outdated laws. A lot of state governments have also abolished a lot of redundant laws, still businesses are saying things are very difficult, sources said.
The government will introduce the second Jan Vishwas (Amendment of Provisions) Bill in Lok Sabha on Monday to further decriminalise minor offences under different laws and bring about a change in regulations for the ease of doing business and living.
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“In manufacturing, cost of business should be reduced across states and the Centre. We have to get rid of all outdated laws which are irrelevant in today’s times,” an official said.
There has to be synergy across departments in the state and central governments as doing business should not be a painful process. Besides manufacturing, the task force will likely look at financial sector reforms, making India an international financial services centre like London and Singapore, sources said.
With digitally enabled services growing, the task force may look at what should be done to tap more IT, ITeS, business services.