When it comes to sectoral problems in the country, the government has been doing an excellent job, responding to issues quickly. The Finance Minister Nirmala Sitharaman, when announcing revisions in the tax rates on Foreign Portfolio Investments (FPIs), also pointed out significant changes in the real estate sector as well.
Changes in the policies can a long way with all economic issues raised being sectoral in our country. Recently, the Centre had approved 100% Foreign Direct Investment (FDI) in the commercial coal mining sector.
However, the mining conducted is restricted to a limited area despite the vast Indian geology. According to a recent paper published by Niti Ayog, even a small increase in the area for mining purposes could create up to 5 million job opportunities in the next few years. In the same line, investments in the mining sector will only improve with streamlined environmental clearances.
When it comes to the telecom sector, lowering the statutory levies can boost investment by a considerable margin. According to sources, the government’s pre-tax share of telecom revenues was holding at 25% in 2018.
With the Supreme Court expected to address the issue concerning the government’s definition of ‘revenue’, the telecom sector could find themselves with Rs.92,000 crore bill after the ruling.
Despite the Prime Minister’s promise to cut imports by 10% by 2022 in the oil and gas sector, a few miscalculated policies put in place resulted in import dependence surging. While gas imports rose from 30% in FY13 to 25% FY18, oil imports witnessed an increase from 83% to 86% during the same period. A revision of the laid out policies by the government can go a long way when it comes to imports dependence.
Similarly, investments in the real estate sector can only be improved if the government acts proactively on issues concerning grounded real estate projects. Assigning these projects to develops and builders with an excellent track record for completion and delivery on time can be the right move.
All these sectors have great potential to improve consumption and employment, which in turn can boost the Gross Domestic Product (GDP) of a country. Sectoral reforms play a significant role in GDP growth. The sooner these reforms are implemented, the more impact it will have on the GDP.