Key takeaways from Prime Minister’s Independence Day speech

'Reform, Perform and Transform' - PM Modi's new motto.

On India’s Independence Day, PM Modi delivered a speech which updated his vision for India. Ever-ready with a phrase to capture his vision, the Prime Minister coined:

‘Reform, Perform and Transform’.

Reform

As the The Modi Government Progress Report we recently published shows, Mr Modi has made progress on his reform agenda. Our view, and that of our members, is that much has been achieved, and there is much still to do. There is also recognition that reform is a process, and durable changes take time to design, introduce and embed.

In his Independence Day speech, PM Modi undertook to reform the income tax system so that people, particularly, middle class families, were no longer afraid of the income tax authorities. A clear road map of how these changes will be made is yet to be confirmed, but this is significant because it signals an intent to do more to collect income tax in a country where only one per cent of the people pay it. An efficient, effective and transparent income tax authority will not just bring in more money for the Government but also help build people’s trust in the Government.

Of course, a similarly constructive relationship between businesses and the tax authorities will boost India’s investment attractiveness.

Perform

The same applies to the performance of the Government since it took office in 2014. Great strides have been taken. India has risen in the World Bank’s Ease of Doing Business rankings, e-government has been expanded, and Modi’s speech highlighted the increased efficiency of India’s passport issuing. The number of applications has risen sharply, but the waiting time has dropped from several months to only two weeks. This is a very impressive administrative feat.

Perhaps with crucial state elections on the horizon, the PM went on to commit to do all that was possible to keep inflation under six per cent. A good monsoon will help keep food costs low, but the Government’s economic management will also need to remain strong, as will that of the incoming RBI Governor. Raghuram Rajan will be a hard act to follow.

Transform

By replacing the socialist era Planning Commission with the National Institute for the Transformation of India (NITI Aayog) and putting the dynamic Amitabh Kant at its helm, the PM had already put his cards on the table.

The recent passing of the GST Bill will  be transformative for India – its politics and its economy – making the country, for the first time, a single market.

Reflecting on Mr Modi’s speech and the context in which it was delivered, Kevin McCole, Chief Operating Officer at the UK India Business Council, said: “As ever, Modi hit the right notes. The meanings behind the phrase – reform, perform, transform – are not new. The PM set out on this journey in May 2014. I really welcome, though, the fact that he is re-stressing their importance, albeit in different a language.

“Like any good leader of a change programme, the Prime Minister’s speech gave examples of wins to show that his efforts are delivering results and set new near term targets – tax and inflation. Of course, Modi is not just a leader of change, he is a political leader. So it is no surprise that these targets – the next wins – are things that matter to Indians. That, as India celebrates 69 years of independence, is how it should be.”

Click here to download the UK India Business Council’s Modi Government Progress Report