The year 2018 was by far a very eventful year that witnessed significant policy push as India started benefiting from the reforms it initiated between 2014-18. The focus of the year was however on equitable growth to ensure that the benefits of India’s growth are uniformly distributed.
It is no secret that the government has renewed the focus towards financial inclusion, and it has had some impressive results as India currently has universal financial inclusion at the household level. The year 2018 saw the government take this process a step further as it focused on deepening of financial services that are used by Indian households. With over 400 schemes already under the DBT framework, nearly all households are using basic banking services, but the government realizes the need to move towards financial integration rather than mere financial inclusion.
As a consequence, the government launched the Indian Postal Bank, which converted the post offices as banks and the nearest postman as the banker to every Indian. By careful segregation of the new age banks by classification as “payment” banks and “mobile-wallets”, the government has set in motion a policy framework that is acting as a catalyst for Banking 4.0.
The government has also leveraged technology further to provide for a credential-based credit facility through the 59-minute loans. It has been argued time and again that the critical bottleneck towards the growth of MSME sector has been inadequate access to credit. By democratizing credit and providing a credential-based credit, the government ensures that there’s transparency in lending practices so all eligible can take small loans up to Rs. 1 Crore.
For every year of the Modi Government, there’s a flagship scheme that can be identified and it is these flagship schemes that are most impactful in terms of improvement of the quality of life on Indian citizens. 2018 is definitely the year of Ayushman Bharat- the world’s largest healthcare insurance scheme. It is no secret that more than 50 per cent of Indians prefer private sources of healthcare than public according to the NFHS-4 and this is because of inadequate provisioning of healthcare in public hospitals. To augment the service and ensure quality in public hospitals would have taken a couple of years as the government upgrades the Primary Healthcare Centres and creates new Health and Wellness Centres but in the meanwhile, to ensure that the burden of healthcare expenses on the poor does not force them in debt trap, Ayushman Bharat ensures free treatment cover of up to Rs. 5 lakh rupees per family. With over 2 lakh beneficiaries availed the treatment under Ayushman Bharat, this scheme has become the most significant healthcare sector reform in India since independence.
The year witnessed a significant focus of the government on the farm sector as it accepted the Swaminathan Committee recommendations and increased the MSP to be 50 per cent above the cost of production. It also has stated that it will put in place a price deficiency system whereby farmers would be compensated should they trade at a rate below the MSP. Both these measures are bound to significantly strengthen the rights of rural poor and farmers.
The year 2018 for the government was about starting new initiatives that further consolidated upon the earlier announced initiatives, but the government also worked towards addressing some critical challenges that it faced since it inherited the economy in 2014. The NPA crisis has led to a systematic decline in banks’ ability to provide credit, however, the Government enacted the Insolvency and Bankruptcy Code in 2016. Through provisions of the code, the government was able to resolve a major share of the NPAs in 2018 while by the end of 2019, the NPA issue would be largely resolved. It is important to also note that the Insolvency and Bankruptcy Code does not only resolve the issue for now, but it will ensure that there’s no build-up of such bad loans in the system going forward due to a speedy resolution of such loans.
The year, however, ended with the GST finally shaping up as the most consumer-friendly taxation regime that India has ever experienced. With rates on most commodities coming down, it is safe to say that the current form of GST is very close to what it is going to look like going forward. There may be some tweaks within the GST going forward, however, the current form is extremely close to the best possible situation for India.
As 2018 came to an end, it must be stated that the year witnessed Modi Government’s commitment towards resolving long-standing issues. The year will go down as the year that witnessed the roll-out of the world’s biggest health insurance scheme, but Ayushman Bharat is just one of the many big things that the government achieved in 2018.
The year 2019 has started with Prime Minister Modi setting the record straight; this government is a government that delivers- and it delivered a lot over the last 4 years and it is going to continue to deliver on its promises throughout 2019, and even beyond that. While our critics rejoice over their recent electoral victory, I must caution them for politics of lies can yield results only in the short run and they’ve already milked whatever they could have from their lies- now it’s our time to debunk their falsehood with the truth!