INDIA – EMERGING POLICY AND ECONOMIC LANDSCAPE

March 14, 2017

• EMERGING POLITICAL LANDSCAPE

• ECONOMIC RAMIFICATIONS

• POTENTIAL KEY REFORMS

• REFORMS AGENDA: 2017 & BEYOND

CONTENT

EMERGING POLITICAL LANDSCAPE

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• Government in its third year laying strong foundation for 2019 national elections

• Landmark programmes released by the Government, such as, Make in India, Skill India, Digital India

• Key policy and legislative reforms to be pursued rigorously –

• FDI policy liberalization

• GST

• Insolvency and Bankruptcy Code

• Labour law reforms

• Pushing state governments on land & police reforms

• Transparency in governance

• Stellar performance (by BJP) at recently concluded elections in 5 states, to facilitate consolidation of power at Upper House of the Parliament – to facilitate ease in passage of non-monetary bills

• Modi’s cooperative federalism to get impetus – land, education, healthcare to assume accountability

EMERGING POLITICAL LANDSCAPE

Source: http://economictimes.indiatimes.com/assembly-elections-2017-results-fate-of-up-punjab-manipur-goa-and-uttarkhand-to-be-

decided-today/liveblog/57585709.cms; March 14, 2017

ECONOMIC RAMIFICATIONS

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• Political stability could entail –

• Improved macro economic fundamentals

• Enhanced dosage of foreign investment flows

• Facilitate infrastructure and capital creation

• Stronger ‘Rupee’, lower deficits

• Internal/ external factors that could spoil story –

• Brexit; future of EU; Trump administration’s stance

• Corporate results of 2017 Q1 to watch out

• Over zealous tax administration coupled with enhanced powers

• Domestic private investment yet to take off

• Banking reforms and dealing with NPAs

ECONOMIC RAMIFICATIONS

Potential key reforms

POTENTIAL KEY REFORMS

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• Privatization of state-run entities

• NITI Aayog has identified State-run entities for disinvestment

• Disinvestment to mobilize additional revenues for Government, at the same time lending efficiency to functioning of entities

• Restructuring of banks, oil companies, airports expected

• GST is on target July 1, 2017

• Labour reforms – will it happen now?

• Evolution of regulatory framework for Oil & Gas sector –

• Implementation of OALP

• Natural gas pricing

• Airport, Seaport, Roads, Railways, Renewable Energy to remain thrust areas for public investment

• Banking reforms and tackling NPAs

POTENTIAL KEY REFORMS (1/2)

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• Tax reforms – expansion in taxpayer base, ‘GDP to tax’ ratio to increase

• Crusade against ‘black economy’ to fortify – IDS, PMGKY, Benami transactions Act

• Land registration reforms (national registry) and refined Gold monetization

• FDI Policy liberalization

• Permitting FDI in retailing of products (other than indigenous food products)

• Curtailing list of activities placed under government approval route

• Abolition of Foreign Investment Promotion Board

POTENTIAL KEY REFORMS (2/2)

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• Assessing impact of Trump administration

• Trump’s stance towards India unknown/ unspoken

• Will India and US pursue independent bilateral trade ties

• Strategic Defence partnership and Naval exercise unlikely to be impacted

• India to continue watching developments on US Visa and ‘border tax’ issues

REFORMS: 2017 & BEYOND

GLOSSARY

• Bharatiya Janata Party – BJP

• Foreign Direct Investment – FDI

• Goods and Services Tax – GST

• Income Declaration Scheme, 2016 – IDS

• Non-Performing Assets – NPA

• Open Acreage Licensing Policy – OALP

• Pradhan Mantri Garib Kalyan Deposit Scheme, 2016 – PMGKY

• The National Institute for Transforming India – NITI

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This presentation provides general information existing as at the time of preparation and reflects personal views of the speaker/s. The presentation is only meant for this webinar. No responsibility for loss arising to any person acting or refraining from acting as a result of any material contained in this presentation will be accepted by the speaker/s. It is recommended that professional advice be taken based on the specific facts and circumstances.

DISCLAIMER

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