This Deepavali, let’s celebrate the power of reforms to help India fulfil its dreams
About 10 days after Deepavali in 2014, a leading international business daily carried an article titled ‘India is a nation in need of a trade deal with itself.’ The article presented the challenges of moving freight in India where “29 states, as well as the central government, could issue licences, levy taxes and impose regulations.”
That was an era when truckers spent barely 40% of their journey time actually driving and the rest was lost at over 650 border checkpoints, toll plazas and entry points.
Prime Minister Narendra Modi, in his address to the nation on the eve of the roll-out of GST 2.0 reforms this year, referred to this bygone era by citing the example of a French logistics firm that discovered that it was cheaper to ship parts from Bengaluru to Europe and then back to Hyderabad than to send them directly across Indian states.
These were not anecdotal experiences, but the norm till the goods and services tax (GST) was introduced.
India’s first GST structure was rolled out in 2017 under the banner of ‘One Nation, One Tax, One Market,’ signalling its primary aim. From automated audits to real-time tax credits and e-way bills, this tax reform has since created a transparent, predictable and digitally empowered marketplace, enabling companies of all sizes to plan, produce and deliver without delay. In recent times, 120 million e-way bills are being generated every month—a reflection of the fast pace of business activity.
The reform trinity of tax, logistics and structural resilience: The rollout of GST 2.0 reforms this year has added extra glitter to Deepavali celebrations across India. Building on the success of the first phase, GST 2.0 takes another decisive leap forward. It stands as a reflection of Prime Minister Modi’s leadership style of fusing policy prudence with the public pulse.
Households are saving thousands on essential items, medicines, groceries, gold and cars, injecting an estimated ₹2.5 trillion into the economy. Rooted in the ideal of ‘Atmanirbhar Bharat,’ GST 2.0 adds to an 11-year journey of inclusive governance, breaking down silos and harnessing India’s inherent potential.
The development architecture laid out over the past decade has ensured that a record 200 million people have been lifted from extreme poverty, as per reports. Schemes like the Pradhan Mantri Garib Kalyan Anna Yojana, Ayushman Bharat and housing schemes have provided free foodgrain, covered people’s medical expenses and constructed 40 million housing units across rural and urban India to ensure that those being lifted out of poverty can aspire for a better life.
At the same time, an income tax regime that exempts those earning below ₹12 lakh annually ensures that the country’s middle class has the financial wherewithal and discretion to spend and invest for a better future.
India’s vibrant and aspirational middle class: The reforms in taxation and logistics, plus an unprecedented focus on structural resilience have not only turned India from a bureaucratic quagmire into an economy that ranks among the world’s top five, but also ensured we now have one of the world’s most vibrant middle classes.
Today, over 90 million Systematic Investment Plan (SIP) accounts are active and have recently been contributing about ₹28,000 crore every to mutual funds—showcasing disciplined savings and the resilience of domestic investors, whose confidence continues to power the nation’s progress.
Just last month, inflation in India hit an 8-year low of 1.5%. This could be attributed to a decade of methodical reforms that have managed to tame India’s chronically volatile inflation rates.
Amendments made in 2016 to the RBI Act locked inflation targeting into India’s policy framework as a mandated central bank practice to ensure price stabilization, transparency and consensus-based monetary decisions.
Price shocks that have unseated governments globally are now becoming alien to India. Both India’s poor and the middle class have benefited from having a kavach (shield) against the vagaries of runaway inflation.
As inflation eases, RBI can ease policy interest rates, allowing for loans for housing and other purposes to become cheaper and reducing pressure on monthly repayments and EMIs.
This Deepavali is an opportune moment to reflect on our civilisational ethos that celebrates prosperity.
We now have a policy framework of upward mobility for the aspirational classes. Prime Minister Modi’s dream for India in its 100th year of independence in 2047 is that of a Viksit Bharat—or developed India. To this end, we must lift more and more people out of poverty and ensure that our middle class has all the tools at their disposal to realize their aspirations.
As the size of our aspirational classes grows, India grows.
The author is union minister of coal and mines and represents the Secunderabad Lok Sabha constituency.
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