"Improved governance, favourable conditions to conduct business, transparency in government procedures and responsive policy making with an immediate focus on effective implementation of government reforms will continue to evolve India into a preferred destination for foreign investment," highlights the report titled 'India: Transforming through radical reforms,' jointly conducted by The Associated Chambers of Commerce & Industry of India (ASSOCHAM) and global advisory firm Ernst & Young (EY).
The report also terms demonetisation as a major step aimed at strengthening India's proposition of becoming a transparent economy by curbing black money, terror financing and fake currency circulating in the economy.
"Combining demonetisation with Digital India and Pradhan Mantri Jan Dhan Yojna will ensure transparency in financial transactions. Transfer of subsidies through bank accounts opened under the scheme has removed the middlemen, thus eliminating one of the biggest contributors to corruption," says the report.
Goods and Services Tax (GST), which is expected to be rolled out by July 2017, will further boost the economy by simplifying the indirect tax structure and eliminating the cascading effect of taxes on customers and make doing business easier in the country, according to the study.
The report also says that the Make in India initiative has provided robust support to India's manufacturing sector, backed by domestic demand and many regulatory reforms. It has helped India become the sixth largest manufacturing economy in the world in 2016.
Reforms like 'Power for All', 'Smart Cities', 'Skill India' and 'Startup India' are expected to work in tandem with 'Make in India' to help the country achieve the goal of becoming a manufacturing hub, the report adds.
"All these radical reforms are acting as enablers for boosting the domestic environment, which in turn is improving the country's stature globally. The major reforms from the Government will continue to boost investor sentiment and India's outlook across the world," notes the report.
The study also complements the government's view of promoting innovation and entrepreneurship through various reforms to equip the young workforce to face the changing global economic environment and technological disruption.
While the pace of India's radical reforms may vary, the direction is firmly set toward higher growth. The economy will continue to benefit from significant progress in trade, proactive policy actions and robust external buffers. (KD)
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