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Mint
21 minutes ago
- Mint
Modi meets key ministers, economists to discuss 100-day reform agenda
New Delhi: Prime Minister Narendra Modi on Monday huddled with senior ministers, top bureaucrats and economists to draw up a 100-day roadmap for 'next-generation reforms' aimed at sustaining India's growth momentum and insulating the economy from fresh US tariffs on exports, three persons familiar with the development said on condition of not being named. The meeting was attended by home minister Amit Shah, finance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal, Railways minister Ashwini Vaishnaw, secretaries of key departments, and select economists. 'Chaired a meeting to discuss the roadmap for next-generation reforms. We are committed to speedy reforms across all sectors, which will boost ease of living, ease of doing business and prosperity,' the Prime Minister said in a social media post. Individual ministries have been urged to come up with tailored measures towards the 100-day agenda to accelerate India's economic growth, one of the persons quoted above said. Another issue that was deliberated was the impact of tariffs that the US has imposed on Indian exports, said the second person. Notably, the 25% reciprocal tariffs on Indian exports that US President Donald Trump imposed came into effect on 7 August. This may double to 50% on 27 August after additional tariffs imposed for New Delhi's oil trade with Russia kick in. Given that such high tariffs could impact Indian exporters' competitiveness in their largest export market, policy makers are keen to step up domestic consumption demand and, thus, capacity utilisation in factories, which will ensure jobs are protected. Modi had highlighted the need for faster economic growth in his Independence Day speech on Friday. 'We want to grow fast,' Modi said in his speech while announcing that a task force will give recommendations in this regard. Current law, practices, procedures, etc, should be aligned to the 21st century and the global environment, and should aid India in becoming a developed country by 2047, Modi had said in his address. The theme of stimulating the economy through reforms was already in motion early this financial year as Sitharaman presented a reform-focused budget in February with big cuts in income tax, welfare targets for inclusive growth, and across-the-board reforms especially in regulatory framework, taxation and the financial sector. Policy makers believe cutting red tape and making it easier to do business can unleash the entrepreneurial spirit of people, which can help to achieve much more than what the government and state-run firms can do directly, the people cited above said. While agriculture and services are performing well, the government wants to increase the share of manufacturing in the economy, which can fetch more and better paid jobs to people. The Centre has also launched several schemes to address the skill gap among the youth that affect their employability. India's GDP is projected by the Reserve Bank of India (RBI) to grow at 6.5% this financial year. Above normal monsoons, the income tax relief announced in the budget, and a 100-basis points reduction in RBI's repo rate are also expected to support growth this year. On 14 August, Mint reported that the government has asked 37 ministries to submit a detailed report on the key compliance requirements that are creating roadblocks for manufacturers, exporters, investors and small enterprises, and hurting their ability to conduct their businesses smoothly. Subhash Narayan contributed to this story
India Today
an hour ago
- India Today
What India's credit ladder climb means and how to boost it further
On August 14, a short bulletin from S&P Global set the Indian markets abuzz. The credit rating agency had lifted India's sovereign rating from BBB- to BBB, ending an 18-year-long wait since the last such the crowded lexicon of financial jargon, this shift might sound incremental, but in the tightly codified world of sovereign credit, it is the difference between being barely in the club of investment-grade economies and having a slightly more comfortable seat at the developments happened as New Delhi is fiercely negotiating trade deals with Washington DC and Brussels, the Donald Trump administration has slapped 50 per cent additional tariffs, impacting Indian exports to the United States, and Prime Minister Narendra Modi is talking about unlocking the Swadeshi 2.0 version of economic credit rating improvement came as an applaud. The rupee strengthened, bond yields eased and a chorus of congratulatory statements rolled in from the finance ministry and industry bodies. In total, the S&P upgrade could unlock $30-50 billion (or more) of fresh capital into India's bond markets alone—both passive and active—within a 12-18 month window. Coupled with improved yields and investor sentiment, this could lower borrowing costs for both sovereign and corporate borrowers, deepen the bond market and reinforce India's credibility in global capital markets. Yet, behind the instant reactions lay a more interesting story—why now, and where next?S&P's decision was not the product of a single data point but a slow accumulation of signals over the past three years. One was the Reserve Bank of India's (RBI) resolute defence of its inflation target. After the Covid pandemic years of price volatility and a bruising spell of food and fuel spikes, the central bank tightened policy and then resisted the temptation to cut which had looked stubbornly sticky, drifted back towards the midpoint of the 2-6 per cent range, averaging about 4.6 per cent in FY25, its most benign reading in six years. In S&P's language, this was 'anchoring expectations'—a phrase that may sound bland but carries enormous weight in the models that decide sovereign second signal was fiscal. Since 2021, the government has stuck to a publicly declared glide path to reduce its deficit, despite election cycles and expenditure pressures. The FY26 target of 4.4 per cent of the Gross Domestic Product (GDP) is a credible marker of intent for a country emerging from the pandemic's fiscal deep importantly, the quality of spending has shifted. S&P took note that more public money is being channelled into infrastructure—roads, rail, ports and digital networks—rather than into ballooning subsidies. This is the sort of spending that rating analysts are willing to overlook in deficit arithmetic because it has the potential to boost productivity and expand the tax for all the optimism, BBB is only the bottom rung of investment grade. It signals moderate credit risk, a step above speculative territory, but still far from the As and AAs that bring the lowest borrowing costs and the broadest investor access. India is in the same bracket as Greece and just a notch below Italy and Portugal. To climb further, the country will have to turn these early wins into an unbroken agencies want to see the debt-to-GDP ratio, now hovering above 80 per cent, move decisively downward. They want inflation to stay boring, as central bankers say neither too high to invite panic nor too low to suggest stagnation. They want external buffers thick enough to weather oil price spikes, trade disruptions or sudden stops in capital means keeping foreign exchange reserves comfortably in the $680-700 billion range or higher, even as the RBI steps in to calm the currency during bouts of volatility. It means lifting exports of higher-value goods—electronics, pharmaceuticals, renewables supply chains—so that the current account deficit narrows without throttling domestic demand. It means deepening the corporate bond market so that infrastructure can be financed without leaning so heavily on state-owned banks and the sovereign more difficult reforms will play out away from the capital. State governments remain weak links in the sovereign story, with power distribution companies bleeding cash, tariff reforms stuck in political stalemate and capital expenditure often the first casualty of revenue stress. Since S&P assesses 'general government' debt and deficits—combining the Centre and the states—these subnational lapses drag the whole rating down. Cleaning up state-level finances, particularly in the electricity sector, would be a visible marker of structural balance-sheets, though healthier than a decade ago, still require vigilance. Non-performing assets are lower, but credit growth is heavily skewed towards retail loans, with investment credit lagging. A deeper, more liquid bond market could reduce the dependence on bank funding and provide alternative channels for long-term infrastructure finance. S&P and its peers are explicit: countries with diversified financial systems are more resilient and thus more India can deliver two or three consecutive years of meeting or beating its deficit targets, trimming the debt ratio, holding inflation steady and preserving reserves, another upgrade—to BBB+—by the latter half of the decade is realistic. That would make India more attractive to global pension and insurance funds bound by stricter investment mandates, lowering the cost of capital across the economy. The next leap, into the A category, is harder and will demand deeper reforms in land, labour, and logistics—areas where political economy often overwhelms economic now, the August upgrade is a reward for consistency. The Narendra Modi government has resisted populist temptations to derail the fiscal path, even in a politically charged environment. The RBI has kept its inflation target in sight and avoided sudden, credibility-sapping moves. Markets have taken note, foreign investors are circling back, and the agencies are acknowledging that India is less of a credit risk than it ratings are forward-looking. They are less a reward for what has been done than a bet on what will be sustained. The next few budgets, the next few inflation prints, the next set of reserve numbers—they will all feed into the decision on whether this August's announcement becomes the first in a chain of upgrades or a solitary uptick in a long symbolism of the date—a day before Independence Day—was not lost on the political establishment. Ministers spoke of global recognition of India's economic management, of validation for Viksit Bharat 2047, of a vote of confidence from the world's financial arbiters. In truth, the upgrade is neither a coronation nor a charity. It is a judgement grounded in data that India's macroeconomic fundamentals have improved enough to merit a slightly higher rating. It comes with the unspoken clause that this can be reversed if the fundamentals ratings are often dismissed as lagging indicators, and it's true that markets can sometimes price risk more quickly than agencies adjust their grades. But in the architecture of global capital, these grades matter. They determine the pool of potential investors in Indian debt, influence the cost of borrowing for both government and corporate issuers, and shape perceptions among multilateral lenders. They are, in effect, a passport stamp in the world's credit has just received a cleaner stamp than it had for nearly two decades. The immigration officer, so to speak, has waved it through into a slightly better lounge. But the premium seats are still ahead and the path to them is strewn with the unglamorous work of fiscal housekeeping, monetary discipline, export upgrading and institutional reform. If the country can stay that course, the next time S&P pronounces its creditworthiness, it might not just be an upgrade worth a headline—it could be a step into a new league to India Today Magazine- Ends
India Today
an hour ago
- India Today
How Narendra Modi's expressway push is redrawing India's urban map
Consistent with the infrastructure playbook of his government, Prime Minister Narendra Modi, on August 17, inaugurated two mega infrastructure projects for Delhi—the Dwarka Expressway and the Urban Extension Road-II (UER-II), describing them as transformational veins of the city and the extended National Capital Region (NCR). The projects, costing Rs 11,000 crore and referred to as Delhi's 'third Ring Road', promise to ease transport woes by giving heavy traffic a smooth bypass of the a ceremony attended by Union ministers, state leaders and project workers, Modi framed the new roads as a historical transition in the capital's urban journey. 'Delhi has received the connectivity of Dwarka Expressway and Urban Extension Road. This will make the lives of people from the entire NCR so much more convenient. This highway is going to save time for everyone. The nation is showing the world its strength. Over the past 11 years, life has become so much easier when it comes to commuting in Delhi-NCR,' Modi timing, after all, couldn't be better for a city pummelled for decades by daily gridlocks. The 75-km-long UER-II will connect Delhi's northern, western and southern faces and link directly to Bahadurgarh, Sonepat and several of Haryana's industrial hubs. The Dwarka Expressway, on the other hand, links Dwarka to Gurugram and the IGI Airport through a contemporary high-speed corridor intended to ease congestion on the perennially-jammed Delhi-Gurugram Expressway.'These are not just projects but structures that direct the mobility, environmental balance and economic future of the capital region. These projects have improved connectivity, reduced pollution and time wastage, and represent a decisive step in reshaping the future of the national capital. This is game-changing connectivity leading Delhi towards being a world-class capital,' declared the prime minister, linking mobility to the aspirations of a rapidly-developing India. The two roads are exemplars of a development template the Modi government has honed since 2014: in the past 10 years, the focus has switched from patchwork repair to comprehensive, mega-projects intended to unclog cities, improve logistics and unleash new economic corridors.'In 2014, when the Modi government came to power, the condition of Delhi was not good,' said road transport and highways minister Nitin Gadkari. 'There were traffic jams everywhere and pollution was quite severe. Based on a study of these problems, the honourable Modi ji gave us plans to make Delhi a world-class city. We started work, costing Rs 65,000 crore in the first stage, and today Rs 48,000 crore worth of work has been completed.'From 93 km in 2014, the total length of national high-speed corridors increased to 2,474 km in 2024. More than Rs 65,000 crore has been pumped into expressways to decongest metros, including Rs 9,000 crore on the Dwarka Expressway, Rs 8,000 crore on UER-II, Rs 12,000 crore on the Eastern Peripheral Expressway and Rs 8,000 crore on Delhi-Meerut August 17 inauguration was also used to signal the government's broader ambition for Delhi. 'The new Parliament, the Central Secretariat, Kartavya Path, convention centres all indicate that this government is thinking big for the capital. With a focus on consistent and purposeful development, we are keen to ensure that Delhi becomes one of the world's best capitals,' Modi like all projects, the latest infra push too can be extrapolated politically. Modi emphasised that commuters from Haryana—farmers who will transport their produce and people working in far-flung satellite towns of NCR—will benefit as much as Delhiites. 'The growth story isn't just about Delhi. Haryana, Rajasthan and Uttar Pradesh and the people of these states —everyone benefits when infrastructure is being enhanced,' he to next? The broad push to connect is already yielding visible dividends in the form of faster movement of freight, lower freight costs, safer travels and a return of investors to the party. The Delhi model is being followed in other metros, with ring roads and bypasses diverting heavy vehicles from clogging city India, decongestion schemes adopt a similar design philosophy. Mumbai now boasts of the country's longest sea bridge, the Mumbai Trans Harbour Link, while the Samruddhi Mahamarg expressway provides a rapid link between Mumbai and Nagpur. In NCR, work is progressing on the Jewar international airport, which is set to give Delhi a major second international on the other hand, is upgrading the NICE Road corridor and expanding both the Peripheral Ring Road and the Satellite Town Ring Road under the Bharatmala programme. Hyderabad has completed building its Outer Ring Road for easing traffic congestion. Chennai could enhance the Peripheral Ring Road by creating a second outer ring road and introduce expressways to the port, while Kolkata could widen the Dankuni Expressway and Eastern Metropolitan corridors, such as the Delhi-Mumbai Expressway and Uttar Pradesh's Purvanchal, Bundelkhand and Ganga expressways, have both long-haul logistics and urban bypass roles. Further to the east, the Raipur-Vishakhapatnam corridor will serve to even out freight movement and unclog bottlenecks around industrial was emphatic that the latest inaugurations for Delhi weren't standalone successes but milestones on a long path. 'The resolve of this government is to bring every modern amenity and world-class facility to the people, not as a privilege but as their right. These roads are just one more initiative for the comfort of people's daily lives. Development is our fate, and together we are marching ahead—one milestone at a time,' he to India Today Magazine- EndsMust Watch
