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Private sector is geared up to shape India’s economic future

TFI Desk by TFI Desk
4 January 2023
in Economy, Opinions
privatisation
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In the year 2013-14, when the then Gujarat CM made his pitch for the highest chair of India, the biggest problem that lay ahead was Policy Paralysis. The UPA 2.0 failed miserably on the economic front and could not keep the economy moving. While the Narendra Modi government has been rigorously toiling to change the economic image of the country, it is often criticised for privatisation.

India’s economy has always been tilted towards privatisation of entities. Collective ownership has been a norm and business and production were never under states’ control. This was the time when India flourished and came to be known as ‘Sone ki Chidiya’ or the golden sparrow.

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However, leaders like Jawaharlal Nehru and Indira Gandhi vehemently pushed for nationalisation. This acts as the ground when opposition parties go all guns blazing against the Modi Government. However, not only ancient principles but recent data has also proven the farsightedness of the NDA government.

India’s private sector output at 11 years high

As per a private survey, both India’s service as well as manufacturing sector have seen an increase. The service sector has increased at the fastest pace in December as compared to the past six months. With both sectors rising, the composite index rose to 59.4 in the month of December, which happens to be the highest since January 2012.

The composite index in the month of November was recorded at 56.7. With this the growth of private sector output climbed to a 11 year high. As per data, the output growth of the manufacturing sector has reached a 13 months high. The service sector has increased at the fastest pace in December as compared to the past six months.

Also read: ‘Attack on private sector is unacceptable,’ says Modi as we behold the rise of a Chanakyan economy

What data suggests?

As per the Global India services’ purchasing managers’ index (PMI), India has seen the strongest expansion of business in the last six months. It was established with PMI Business Activity rising from 56.4 in November to 58.5 in December. The rise shows an increase in job opportunities along with that the companies remained upbeat. In the aforementioned time period, finance and insurance companies were found to be the best performing sectors.

Pollyanna De Lima, economics associate director at S&P Global said that, “December saw a welcome expansion in Indian service activities.” It has also been forecasted that the numbers suggest an optimistic year for Indian businesses and companies, while the world slips into recession.

The debate around privatisation

As Jawaharlal Nehru became the first prime minister of India, ancient economic values were discarded and the red revolution slowly swooped into the political domain of the country. It is in public that Nehru once said to JRD Tata that he “hates the very mention of word profit.”

Nehru passed on the baton to Indira and the hate and apathy for private businesses and profit making continued. The economy of the nation was destroyed for political reasons. The leaders brought state’s intervention in the economy and muzzled the spirits of entrepreneurs.

From Banks to industries ranging from coal to insurance, food to industrial production, all were nationalised and the income tax was increased up to 96 per cent.

Also read: Modi govt’s decision to give business to private banks is a huge step towards privatising Public sector banks

However, the Modi government has adopted an egalitarian approach as it understands that a centralised system cannot provide desired results all the time. Thus, on one side welfare programmes like Ann Yojana, Ayushman Bharat Yojana and Jan Dhan Yojana have been implied. Side by side, there is a push for privatisation as it is a fact that privatisation means better services. As, privatisation provides incentives to the labourers, making the entire process commercially profitable. Thus, it can be said that India’s private sector will take India’s economic growth forward.

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Tags: Ann YojanaAyushman Bharat YojanaBJPIndiaJan Dhan YojanPMIprivate sectorPrivatisationUPA
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