Substantial progress has been made towards restoring economic momentum. Much remains to be done.
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Prime Minister Narendra Modi
With nearly 80 per cent of the poor living in rural areas, the government has rightly given the highest priority to reviving agriculture. A major initiative to create a genuine national agricultural market through e-auctions in mandis across the breadth and length of the nation has been launched. It promises to bring remunerative prices to farmers. The government has permitted 100 per cent FDI in the food chain as long as the produce originates domestically. To boost productivity in agriculture, the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) is being implemented in mission mode with emphasis on low-hanging fruit, such as command area works of projects otherwise complete. The government has given high priority to drip and sprinkler irrigation. It is creating soil- and seed-testing facilities at 2,000 retail outlets of fertiliser companies. The Prime Minister’s Crop Insurance Programme, with much of the cost covered by the government, has also been launched. The NITI Aayog will soon unveil a model land-leasing law to help modernise tenancy laws across states.
On the external front, the cap on FDI in insurance, which had remained stuck at 26 per cent for more than a decade, has finally been raised to 49 per cent. Defence has been opened to FDI with the cap through the automatic route recently raised to 49 per cent from 26 per cent. A 100 per cent FDI in defence is permitted through the approval route. FDI up to 100 per cent has also been permitted in marketing of food products produced in India; high-tech and capital-intensive activities in railways; coffee, rubber, cardamom, palm and olive plantations; manufacturing of medical devices; e-commerce marketplace; and non-bank automatic teller machines (ATMs).
Early in its tenure, the government introduced legislation to auction coal and other natural resources. The reform brought increased transparency to the process with several auctions conducted in quick succession. The government has auctioned 31 coal mines and allotted another 42 mines to state entities for total proceeds of approximately Rs 3.4 lakh crore and six mines of minerals for Rs 18,000 crore. Among the early reforms was also the end to diesel subsidy with the price fully deregulated.