Business Guide | Israel-India 2022

Financial Sector Based on Economic Survey, India’s capital markets (viz Sensex and Nifty), have done exceptionally well. Start-ups and corporates have record mobilization of capital leading to India outperforming its peers amongst major emerging market economies, followed by an unprecedented boom in fundraising through IPOs. Sectoral Impact on Supply Side The supply side reforms have been a distinguishing feature of India’s economic recovery. These supply-side reforms include deregulation of numerous sectors, simplification of processes, removal of legacy issues like ‘retrospective tax’, privatisation, production-linked incentives and so on. Some of these have been listed in the Economic Survey are as follows: Sectors Measures/Reforms Industry Production Linked Incentive Scheme for 13 sectors, repeal of retrospective tax BPO sector Liberalized guidelines for Other Service Providers abolition of bank guarantee requirement; Work from Home and infrastructure sharing permitted. Telecom Rationalization of AGR, Bank Guarantees, Interest rates etc, no Spectrum Usage Charge, encouragement to spectrum sharing. Ease in customs clearance, self- declaration; auction calendar etc. Public Procurement policy Newguidelines for procurement and project management, stringent deadlines for making payments and arbitration and dispute resolution etc. Aviation Drone Rules announced, abolition of several prior approvals, security clearance to foreign entities to manufacture drones in India. Financial sector Banking reforms; factoring ecosystem, etc. Micro Small, Medium Enterprises Market access, public procurement policy Space and Geospatial sector Satellitecommunicationandremotesensingsectorsopenforprivatesector;deregulation of geospatial data, liberalised guidelines; self-certification regime; etc. Disinvestment NewPublic Sector Enterprise Policy andAssetMonetisation Strategy for identified strategicsectors(i)AtomicEnergy,Space&Defence;(ii)Transport&Telecommunication; (iii) Power, Petroleum, Coal & other minerals; (iv) BFSI Labour Reforms Introduction of NewLabour codes namely the Code onWages, Industrial Relations Code, Social Security Code and the Occupational Safety, Health and Working Conditions Code, for better regulation of labour disputes and compliances, award, punishment, trade union matters etc. Defence CorporatisationofOrdnanceFactoryBoard, 7 newDefencePublicSector Undertakings created: FDI in Defence sector up to 74 per cent under automatic route and up to 100 per cent by government approval. Current Growth Outlook Economic growth in FY 2022 - 23 supported bywidespread vaccine coverage, gains from supply-side reforms and easing of regulations, robust export growth, capital spending etc. is estimated to grow by 8 . 8 per cent in real terms in 2021 - 22 . It iswidely believed that Indiawould face these challenges from a position of strength built on broadened vaccine coverage, financial sector resilience, robust export and remittances and the government's push to spur capital spending on infrastructure. The author is Partner, Business Advisory Services, ASA Corporate Catalyst (India) Pvt. Ltd 87