Will India's new task force deliver real economic growth or just more red tape?

Washington: US-India commercial ties and the continuing lack of a trade deal dominate conversations in both capitals. A deal seems close, but that has been the case since mid-summer. This period of turmoil underscores a significant point: India has more direct control over the main drivers for job creation and economic growth.

In his Independence Day speech, Narendra Modi announced the formation of a Task Force for Next-Generation Reforms, splitting it into two high-level committees (HLC) - 'Implementation of 'Viksit Bharat' Goals', and 'Non-Financial Regulatory Reforms' - both led by former Cabinet secretary Rajiv Gauba. The HLCs have been mandated to submit monthly recommendation reports, with some indication that reforms will be implemented as soon as reports are submitted, to avoid prolonging the process.

The Task Force for Next-Generation Reforms' mandate is to:

• Reduce compliance costs for startups, MSMEs and entrepreneurs.
• Provide protection from arbitrary legal actions.
• Ensure laws are streamlined for ease of doing business.

While Gauba has asked all central government ministries to submit key institutional and regulatory reform goals, Washington-based Center for Strategic and International Studies' 'India Reforms Scorecard 3.0' identifies 30 major economic reforms that GoI can adopt to propel India forward, in line with the task force's mandate. Five reforms from the scorecard have particular overlap:

• Address multiplicity of GST audits for taxpayers registered in different states. Businesses with operations in more than one state are often audited by multiple state agencies creating operational inefficiencies. There are over 11,000 cases of duplicity of audits.

While nearly 1,300 goods and 500 services are covered by GST, there are notable goods and services like electricity, oil and gas, real estate, and alcohol outside its purview that should be included under the tax regime.

According to World Bank, it takes 17.5 days to start a business in India. It would be in line with GoI's own goals to reduce this to 10 days or less.

Repeal Factories Act 1948, and replace it with comprehensive laws to support industrial employment. The law has several measures on labour, including limited daily and weekly hours and permissible time in factories. States have already begun to amend labour laws to secure manufacturing investments. GoI can aid this effort considerably. The Industrial Relations Code, passed by Parliament in 2020, has not yet been brought into force. GoI has the power to determine the date of implementation.

• Establish a single portal for integrating customs, Directorate General of Foreign Trade (DGFT), ports, banks and shipping companies' submissions, which have separate procedures for document submission and clearances. The Central Board of Excise and Customs launched the Single Window Interface for Facilitating Trade (SWIFT) in 2016 to get online clearances. This does not include exporters.

GoI has announced intentions to move forward on big reforms, such as Jan Vishwas Bill 2.0, relaxing foreign investment restrictions in insurance, amending the civil nuclear liability law, and overhauling the Electricity Act. India's job creation and economic growth imperatives cannot wait for the return of a more coherent global trade system. There is far more progress to be made through domestic reforms than by any number of trade agreements. Now comes the hard part - turning intentions into action.