Ahead of Union Budget, key economic overhauls we can expect from ‘Modi Sarkar’

Mumbai: Being appointed as the new Prime Minister of India, Narendra Modi has promised to unblock stalled investments in power, road and rail projects to revive economic growth that has fallen to a decade low of below 5 per cent.

The new government is likely to bring other useful economic reforms in India as well.  

Here is a look at some major policies:

Goods and Services Tax:  India’s GST faced resistance from various states. Taking into consideration the GST, BJP aims to implement GST in an ‘appropriate timeframe’.

Bank policies:  As per official reports, the panel of Reserve Bank of India in January proposed key changes including targeting consumer price inflation, monetary policy. RBI Act needs to undergo several changes. Modi's government might eventually separate the debt management function from the RBI, on the grounds that debt management sometimes conflicts with the central bank's monetary policy stance.

Focus on state-run firms: The new government is likely to focus on selling its holdings in state-run firms. This move might raise revenues that can work towards the advantage of India's ballooning fiscal deficit and boost economic growth.

Official reports also stated that the rising stock market helped New Delhi raise more than $3 billion (Rs. 18,000 crore at 60 rupees per dollar) via stake sales in the fiscal year to March 31 - but that was only a third of the government's original target. The new government also announced plans to raise Rs. 56,900 crore through asset sales in 2014-15. This could help achieve a lower fiscal deficit target of GDP.

The new government has been formed to serve the the economic needs of the poor as well:

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Labour laws: The new government wants to reform labour laws to boost job-intensive manufacturing and create as many as 1 crore jobs a year for young Indians entering the workforce.

Insurance sector: Attempts to raise the cap on foreign investment in India's $45 billion (Rs. 2.70 lakh crore) insurance sector, to 49 per cent from 26 per cent, have met resistance from employees at state-controlled insurers and their political backers. 

Foreign investments in Defence sector: Maximizing foreign investment in defence would help India reduce imports, modernise weapons systems and speed up deliveries of hardware it needs for operations and training.

India now allows 26 per cent foreign ownership in defence, and proposals to exceed that limit are considered only for state-of-the-art technology. The new government will also allow more foreign investments in defence industries.