Indian companies are better placed now than a decade ago to embark on capital expenditure thanks to a clean-up of bad loans that allows banks to become more aggressive lenders. The government has been sharpening the policy focus on clean energy that not only reduces India’s dependence on imported fossil fuel but also promises accelerated growth for early adopters. Public-funded digital solutions for improved social infrastructure outcomes are seeing a flurry of innovation by a new generation of entrepreneurs. Pivoting away from regional free trade agreements (FTAs) where India was at a disadvantage in manufacturing and offering tariff protection to domestic industry is beginning to show results in export orientation. Selective production incentives could steer local manufacturing up the value chain. They are also designed to seed local supply chains.
India’s economic policy reorientation can claim considerable achievement considering how smoothly it was accomplished. Economic liberalisation has moved from an era of big unwieldy changes to manageable tweaks that punch above their weight. This approach to reform, guidedby prudent economic management, builds on the work that has preceded it and offers steady guidance to economic agents. A decade of creeping reforms has pushed up economic resilience. The process can be expected to endure with continuing attention to detail.
