Indian economy has been on the path of positive but experimental reforms for last two years or so. I call it experimental because India has experimented with these far reaching decisions (or reforms) as a rare and dare task. Post- demonetization in November, 2016 and then goods and services tax (GST) in July, 2017, what is in store for 2018!! Any guess!!! The writing is on the wall – banking and financial services. Thanks to recent banking fiasco surfaced in India, it has taken a lead from other reforms such as in education and healthcare.
According to International Monetary Fund (IMF) also, Indian economy is recovering from GST and demonetization related disruptions which had slowed down the economic growth in recent past.
So far as GST is concerned, the roll out of the GST last year can be considered to be landmark accomplishment that can be expected to enhance the efficiency of intra India movement of goods and services, create a common national market, enhance tax buoyancy, and boost GDP growth and job creation, once the present glitches are removed and system becomes perfect.
Though India is fast turning to normal from disruptions arising out of demonetization and GST, it is high time that banking system is cleaned up thoroughly and systems & procedures over hauled to prepare them as a robust economic catalyst of future India which takes into account the digital economy, tax efficiency due to GST and much less of unaccounted money. This may also bring in fresh investment in these and other ancillary sectors.
Once banking and financial system reforms and concerns are addressed, it would provide the much needed fuel to economic growth. With digital and no cash economy picking up, GST glitches getting corrected and banking reforms taking place with credit off take, manufacturing and service sector recover adding further to growth.
It is hoped that the Indian economy would benefit from further reforms, such as enhancing health and education, encouraging private and public investment and improving the efficiency of the banking and financial system. This would support durable and inclusive growth and enable India to move toward the income levels of wealthier countries.
Banking and financial services reforms (NBFC’s included) would also lead to generation of employment, consolidation among st players, improved operational efficiency and robust regulatory oversight which would focus on need to improve corporate governance culture, of course in letter and spirit. People at the top of any organization (board of directors) ought to know the meaning, objectives and best practices of corporate governance and how can they contribute to enhance this. Those who don’t, have no right to be a director on the board. Once again, corporate governance will see a sea change in its structure, regulatory interference and compliances. Last time it happened at the time of Satyam Computers fraud.