2. Transforming India through Sabka Saath, Sabka Vikas
•Sabka Saath, Sabka Vikas
(Development for All)
Framework
•Transformation Architecture
2
•Transformation Architecture
•Achievements To Date
•Road Ahead
3. We are at a Profound Moment in India’s History
Economic Crisis
Aspirational India
Decisive Mandate in
2014 Elections
- Inspiring
Leadership of the
Prior to 2014 Elections
3
Dysfunctional
Political System
Aspirational India
Leadership of the
PM
- Stable BJP/ NDA
government
- New Hope for All
4. Macroeconomic Stabilization Achieved in 18 Months
Quarterly GDP Growth(%) CPI Inflation(%)
70
bps 380
bps
4
Quarterly GDP Growth(%) CPI Inflation(%)
Annual Fiscal deficit(% of GDP) Quarterly net FDI ($B)
60
bps
30%
Source: RBI database, Mid year economic analysis 205-16, Analyst reports
5. Now India is the only BRICS left standing…
Quarterly Real GDP Growth (%) Exchange Rate ($)
5
8%
Real GDP Growth %
6.7
7.3
3.2
7.4
6.9
80
100
Indexed to March '14 ($)
China
India
5
-5
-3
0
3
Mar-14
1.1
2.1
Sep-15
South
Africa
-3.7
-4.5
1.2
40
60 South
Africa
Brazil
Russia
Source: EIA database, Bloomberg
6. Stabilization Achieved through Deft Economic Management
• Quality of government expenditure – public investments (up ~31%
in Apr-Nov ’15 compared to last year)
• Collection efficiency & buoyancy in receipts - increased excise &
6
• Collection efficiency & buoyancy in receipts - increased excise &
tax on fuel
• Close co-ordination with RBI to achieve macro stabilization
7. Strategy
“Sabka Saath,
Sabka Saath, Sabka Vikas (Development for All) Framework
Core Principles
Hard Assets
Pro-Poor-poverty eradication as a
moral imperative
Pro market- pro competition and
innovation
Build India’s
productive capacity
through an
investment-driven
supply-side approach
7
“Sabka Saath,
Sabka Vikas”
Hard Assets
Soft Assets
Transportation,
Manufacturing, Power,
Housing, Telecom
Empowerment not entitlement
Minimum government,
maximum governance – rule
based, policy driven decision
making
Strengthen
Team India! – Cooperative
federalism
Education, Skill-Building,
Judicial System,
Regulatory Institutions,
Entrepreneurial
Ecosystem
8. Kisaanon ki
Samriddhi
Sustainable
Agriculture
Ek Behtar Jindagi
Quality-of-Life
Improvements
Yuvaon ko Rojgaar
Massive Employment
Generation
Garibon ka
Uddhaar
Poverty Eradication
Transformation Architecture for India
Sabka Saath, Sabka VikasFoodSecurity
UniversalSocial
Security
HousingforAll
MakeinIndia
SkillIndia
up&Standup
India
MUDRA
Agricultural
Productivity
CropInsurance
&Financing
MinimumSupport
Prices
SmartCities
Environment&
climateChange
Transportation
SwachhBharat
Abhiyan
GovernanceReforms
1 2 3 4
8
FoodSecurity
UniversalSocial
Security
HousingforAll
MakeinIndia
SkillIndia
Start-up&Standup
India
MUDRA
Agricultural
Productivity
CropInsurance
&Financing
MinimumSupport
Prices
SmartCities
Environment&
climateChange
Transportation
Swachh
Abhiyan
Build infrastructure through public investments
Robust financial system6
Transparent and predictable tax regime7
Co-operative federalism8
GovernanceReforms
9Desh ki
Pragati
5
9. Poverty Eradication:
Achievements to Date
Aadhaar card
• Unique ID; Efficient direct benefit transfer for MGNREGA & other subsidies
• Nearly ~92% of adult population covered
Jan-Dhan Yojna:
• Zero balance account with benefits like insurance (upto Rs. 30,000) focusing on the unbanked
• ~19 Cr accounts have been opened, that have a balance of ~Rs.30,000 Cr
Pradhan Mantri Jeevan Jyoti Bima Yojana:
• Life insurance scheme for all between age group of 18 to 50; ~2.9 Cr have been enrolled as of
Dec 2015
Pradhan Mantri Suraksha Bima Yojana
• Accident insurance scheme for all between age group of 18 to 50; ~9.3 Cr have been enrolled as
of Dec 2015
Universal
Social
Security
(Central
programs)
9
of Dec 2015
Atal Pension Yojana
• Defined benefit scheme targeted at workers in un-organized sector (88% of labour force),
promising monthly income between Rs.1,000-5,000;15 Lakh subscribers enrolled to date
• ‘Housing for All by 2022‘; Interest subvention on housing loans to beneficiaries belonging
to economic weaker section (EWS) including slum-dwellers and low income groups (LIGs)
• ~20,472 new homes approved for construction (July ’15); 9 citizen sector organizations
and 15 businesses have joined the HFA India initiative
Food
Security
(Central
programs)
Housing
(Central
programs)
• ~67% of Indian population (~82 Cr beneficiaries) to be allocated 5kg grains/month at
highly subsidized prices
• Direct benefit transfer (DBT) scheme for kerosene to be launched in April, 2016
10. Sustainable Agriculture:
Achievements to date
Pradhan
Mantri
Krishi
Sinchai
Yojna
• Scheme is to improve agricultural productivity:
- Expand cultivable area under assured irrigation
- Improve on-farm water use efficiency to reduce wastage of water
- Enhance adoption of precision-irrigation and other water-saving technologies
• Rs. 50,000 Cr from central budget for the next five years
Soil Health
Card
• Document quality of soil to identify its macro and micronutrients, acidic level, and
organic content – to enhance agriculture productivity
• Over 34 Lakh SHCs issued; target of ~14 Cr
• Interest Subvention Scheme for agriculture credit – incentive for timely payments of
10
Agriculture
Credit
• Interest Subvention Scheme for agriculture credit – incentive for timely payments of
farm loans with additional interest waiver of 3%
• Target of Rs. 8.5 Lakh Cr for agriculture credit during current fiscal
• Rural Infrastructure Development Fund to be raised to Rs. 25,000 Cr
Minimum
Support
prices
• Minimum support price (MSP) for rice increased by Rs. 50 per quintal in the
2015-16 season - 3.6% increase over the MSP of Rs.1,360 declared last year
• Raised the MSP for all pulses and Rs. 200 per quintal bonus over the
Commission for Agricultural Costs and Prices proposal
Crop
Insurance
• Significantly lowered premiums for crop insurance -1.5% on rabi crops, 2% on
kharif crops and 5% on commercial/horticultural crops
• Process improvements to reduce delays and leakages in payment of
compensation through direct transfers
11. Massive Employment Generation:
Achievements to Date
Make In
India
• Eased FDI norms in 15 major sectors - Automobile, Aviation, Biotechnology,
Chemicals, Construction, Food Processing, etc
• India top destination for greenfield investment in the first half of 2015-
attracted ~$3 billion more than China and $4 billion more than the US
• Reputed global players have committed large investments eg, Foxconn ($5
Bn), Softbank ($ 10 Bn)
Skill India
• Incent skill training by providing financial rewards
• 1,000 centres across all States and UTs covering 50,000 youth in 100 job roles
across 25 sectors; 40 Cr people will be trained in various skills by 2022
• New Start Up policy; first comprehensive policy to promote entrepreneurship
11
Start Up and
Stand Up
India
• New Start Up policy; first comprehensive policy to promote entrepreneurship
• Rs 10,000 Crore India Aspiration Fund
• Simplified policy environment including easier entry and exit, self
certifications, tax benefits and faster and cheaper patent applications, etc.
Mudra
Yojana
• Micro-unit development and refinance agency (MUDRA) – to increase credit
flow to the MSME sector
• Loans amounting to Rs 71,312 Cr have been disbursed to 1.73 Cr borrowers
to date
Ease of
doing
business
• Process for industrial licensing & other clearances simplified and made online
• DIPP implementing the eBiz project, which will establish a single platform for
business and investment related service
• 98 point action plan for states to improving “Ease of doing business”
finalized; Central govt. to evaluate states based on the implementation of the plan
• India moved 12 spots up in the world bank’s “Ease of doing Business” list
12. Quality-of-Life Improvements:
Achievements to Date
Climate
Change
Treaty
• Agreement to combat climate change agreed by 195 nations in UNFCC held in
Paris
• Agreement aims to contain global temperature rise and while strengthening
ability to deal with impacts of climate change without compromising on economic
development
Faster
Environment
clearances
• Amended several key aspects of the Environment Impact Assessment (EIA)
Notification, 2006 to improve ease of doing business
- Exemption have been offered to certain kinds of buildings and construction projects from seeking
environmental clearances.
• Mission to develop 100 cities in five years, with central govt. funding of Rs.
12
Smart Cities
• Mission to develop 100 cities in five years, with central govt. funding of Rs.
45,000 cr & equal contribution from states
Metro and
Ring roads
• Metro operations planned in over 50 cities across India
- Chennai and Jaipur metro began operations in June 2015; Metros in Kochi and Hyderabad are
expected to open next year
• Multiple ring road projects to decongest cities
Swachh
Bharat
• Achieve universal sanitation coverage, improve cleanliness and eliminate open
defecation in India by Oct 2019
• 39 Lakh individual household latrines and 479 community sanitary
complexes constructed as of Sept, 2015
13. Building Infrastructure Through Public Investments:
Achievements to Date
• Ujjwal Discom Assurance Yojana (UDAY) - revival package for electricity distribution
companies (discoms), significant investments in building IT infrastructure for ongoing
monitoring of discoms
• Promoting Renewable Energy- Launched Global Solar Alliance of over 120
countries to promote solar energy
• 4319 villages electrified since August ‘15; Target to electrify 18,452 by May, 2018
• Coal India output to hit record 550MT in fiscal 2016; Rs 17,000 Cr savings expected
• Rs. 8.5 Lakh Cr investment in the next 5 years
• ~7,000-km-doubling projects and 4,000-km gauge conversion fast tracked in 2015
• Bids for developing 400 railway stations in India on the PPP model
Energy
Railways
13
• Bids for developing 400 railway stations in India on the PPP model
• Rs. 40,000 cr investments for manufacturing 1,000 diesel and 800 electric locomotives
• Sanctioned projects worth 5.6 Lakh Cr; 2.7 Lakh Cr to be for 20,000 kms of NHDP over
next three years
• Total highway construction for 2015 over 6,000 km (highest ever recorded)
• ~20 km roads built every day – set to reach 30km per day
Roads
Digital
India
• Significant improvement in infrastructure and connectivity to offer Government
services online
• Schemes of over Rs 1 Lakh Cr including Digital Locker, e-education, e-health, e-sign
and national scholarship portal
14. Robust Financial System:
Achievements to Date
• 23 new banking licenses awarded to new players
- 2 universal banks, 11 Payments Banks licenses and 10 Small Finance Banks
• FDI limit in insurance increased to 49%
• 2-factor authentication removed from transactions below Rs 2000
• Indradhanush program to revitalize public sector banks
- Seven elements include appointments, bank Board Bureau, capitalization, de-stressing,
empowerment, framework of accountability and governance reforms
• Committed recapitalization of Rs 70,000 Cr, assurance on further infusion, if needed
• Regular asset quality review by RBI and MoF to strengthen bank balance sheets
Banking and
Insurance
Revitalizing
Public Sector
Banks
14
• Revised AIF norms for Attracting – PE investments increased by 67% to reach
1.26 Lakh Cr in 2015
• Composite caps on foreign investments to create uniformity and simplicity in
foreign investments
• Phased increase in investment limit for FPIs in govt. securities
• Policy framework for Masala bonds
Increasing
PE/VC
Investments
Bankruptcy
• Comprehensive new regime for efficient resolution of bankruptcy
• Bill already tabled in the Lok Sabha
Regulatory
Institutions
• Forwards Market Commission, the commodities market regulator merged with the
Securities and Exchange Board of India (SEBI)
15. Transparent and Predictable Tax Regime:
Achievements to Date
• Phased reduction in basic rate of corporate tax to 25% along with
rationalization of exemptions to boost investments
• Set-up Easwar committee to change direct tax law, report submitted, under review
• Accepted recommendation of a panel (led by AP Shah) that minimum alternate tax
(MAT) should not be imposed on overseas portfolio investors
• Biggest indirect tax reform since 1947, leading to efficient economic integration
of India
• Approved by Empowered Committee, passed in the Lok Sabha and awaiting
Rajya Sabha approval
GST
Corporate
Taxes
15
(MAT) should not be imposed on overseas portfolio investors
retrospectively
• CBDT signed 30 advance pricing agreements to reduce tax litigation
• Commitment on no retrospective taxation
• Fresh and revitalized systems/ technology in tax administration with online tax
filing facility and fast refund processing
• Refunds less than Rs. 50,000 approved automatically resulting in faster processing
• Single window clearance for customs
• Simplification of tax code and filing process
• New appraisal system for tax officials with increased focus on quality and
less on meeting tax collection targets
Taxes
Tax
Administration
16. Co-operative Federalism:
Achievements to Date
• States to get higher share of central taxes as per the 14th Finance Commission’s
recommendation, 42% of the divisible pool to states during 2015-16 to
2019-20, compared to 32% earlier
• States will receive Rs 5.79 Lakh Cr of the Centre’s expected gross tax
receipts of Rs 15.67 Lakh Crore
Devolution to
states
• Refocused planning commission as Niti Aayog
• NITI to include leaders of India's 29 states and seven union territories
• Regular review operations of central govt. schemes in states
NITI Aayog
16
• Launched PRAGATI platform for the PM to hold monthly meetings to review
the progress of key projects with Union Government. Secretaries and
Secretaries of State
Centre-State
Coordination
• States to drive Labour law reforms including those related to employment;
Rajasthan, Madhya Pradesh and Gujarat have started amending state
laws
• Competitive federalism – active competition among states to attract investments
through global investor summits
States
empowered
to drive land
and labour
reforms
17. Governance Reforms:
Achievements to Date
Effective Subsidy
Management
• Deregulation of price of diesel and petrol
• PAHAL initiative for effective distribution of LPG subsidy; ~14 crore customers covered and
Rs. 25,000 crore saved
• Aadhaar-based direct benefit transfer (DBT) of subsidies leveraging biometric technologies for
better targeting
Better Procurement
Policies
• New Defence procurement procedure to focus on 'Make in India, redefined offsets
Transparent Natural
Resource Allocation
• Transparent and effective allocation of the minerals ( coal, bauxite etc.) and
telecom spectrum
17
Faster project approvals
• Facilitated clearances for 42 stalled projects worth Rs 1.15 lakh Cr since the Budget
for 2015-16; highway projects account for half of the 42 projects
Revitalize PPP model • Kelkar committee for revitalize the PPP model to drive policy changes
Policies
18. Six High Impact Reform Initiatives Accomplished
Universal
social
security
Effective
subsidy
targeting
Make in
India
Big Bang
18
Massive
increase in
public
investments
Start up
India
New Fiscal
Architecture
Big Bang
Reforms
19. YoY Domestic Airline Passengers Indian Ecommerce Market Size
Economic Recovery Gaining Momentum
20%
market67%
19
YoY Domestic Passenger Vehicle Sales
YoY Domestic Airline Passengers Indian Ecommerce Market Size
Annual Consumer Durable Sales growth(%)
7%
Source: Analyst reports, Euro monitor, DGCA, ASSOCAM, India Ratings & Research. $1=Rs 60 used for conversions
190bps
20. Monsoon Rainfall(% of LTA)Monthly Brent crude prices
But Some Sectors Face External Challenges
-
64%
20
Monsoon Rainfall(% of LTA)
Monthly ExportsMonthly Commodity Index
Monthly Brent crude prices
Source: EIA, Nasdaq, BSE, RBI database, Index of last day for each month
-27%
-
30%
21. Stresses in Banking System Reflect Toxic Legacy Assets
Impaired Balance Sheet Credit Growth Slowdown
80
100
69.0
77.1
82.1
Break-up of outstanding credit for SCB (Rs. Lakh crore)
12%
10-14
CAGR
9%
14-16E
CAGR
Retail
Industry
Services
Agriculture
21
0
20
40
60
FY10
38.1
FY11
45.1
FY12
53.3
FY13
60.5
FY14
69.0
FY15 FY16YTD
16%
17%
16%
15%
7%
9%
Note: Outstanding credit for each financial is the average of opening and closing balance. FY16-YTD data is until Nov, 2015
Source: Analyst reports, RBI database
22. Road Ahead: Much More to Come …
• Goods And Services Tax
• Bankruptcy Code
• Real Estate Legislation
• Deepening And Expansion Of Social Security Schemes
22
• Strengthening Agriculture Through Better Irrigation
• Affordable Housing
• Smart Cities
• Banking Reforms And Consolidation
• EXECUTION, EXECUTION, EXECUTION
