Clearly, there is much improvement needed in the non-cost competition market. The Indian Government first and foremost needs to fix certain problems that pertain to day to day life. The most major changes that need to come about involve highways, labour reforms, taxation, credit mechanisms, and making certain aspects of the conduction of business easier (Bhattacharya 15). Something the government can do to improve business conduction is to instill a firm bankruptcy policy. A lack of one can prove to be an issue when corporations borrow from national banks. When their projects the companies had started shut down, the banks, due to the close relationships built between the companies and the banks, keep giving extensions on the loan term. Because of this continual cycle, both the banks and companies end up saddled with debt. A possible solution to this issue is to find a way to liquidate the company’s assets without destroying their value (Gopinath). In the end, the goal of improving non-cost competition techniques is to attract more FDI, and there are certain actions the India governement can take to promote that, like deregulation of the economy and improving beuracratic effctiveness. The deregulation of the economy entails fewer regulations mandated by the government in the matter of trade and investment. When the central government is not as heavily involved in the trade-related decision making, there is an increase in competition, higher productivity, and lower costs all around. Improving the efficiency of bureaucracy would likely be beneficial because, as of now, it is near impossible to get anything done that deals with government offices in India, such as getting permits or applying for some documentation. There are also certain sectors that could be helped by import substitute industrialazation (ISI). ISI means that it is better to manufacture some goods domestically rather than import them from abroad. For example, there is a high demand for electronics and aerospace products but due to absurd regulations and high importing costs, India is losing out (Gopinath).
A program that the government has put in place that aims to combat poverty and corruption, which are both issues that are destroying India’s non-cost competitiveness, Jan Dhan Adhaar Mobile (JAM) (Bhattacharya 27). JAM is meant to enable the state to give money to those in need directly, without the need for middle-men, which would greatly decrease the potential for corruption from these middlemen. This is a quiet social welfare policy, meaning that it would not disrupt the current way of government too much. The term “Jan Dhan” is representative of Prime Minister Modi’s plan which aims to grant access to financial services like banks, credit cards, and insurance to the poor people who normally could not afford such things. “Adhaar” is the initiative to issue unique identification cards to all Indians. Every person has one ID card and one ID number. This way, no one can create fake identities. Mobile is the part of JAM which aims to give every Indian access to mobile technology to get the opportunity to use a bank and get insurance (George). JAM has the capability to get rid of corruption, thus making life for the poor easier. For example, under MNREGA, the overseers would take large portions of the money they were supposed to use to pay the poor workers. Either that, or they would create fake identities as poor people and steal money that way. With Aadhaar and the biometric identification card, you cannot fake identities and the money can go straight from the government or companies to the rightful beneficiaries, thus eliminating the need for corrupt middlemen. (Gopinath) All the aspects of JAM are actually working and helping people.118 Million bank accounts have been opened through Jan Dhan (George). 1 Billion people have been biometrically authenticated through Aadhaar (George). ½ of all Indians now have a mobile phone. (George). In the coming years, it is clear that JAM will continue to benefit the Indian economy by reducing subsidy burden, transferring resources directly to people, reducing corruption, salaries being received faster, decreasing poverty (George).
While JAM seems to be working, there are few problems that need to be addressed in order to move forward. For example, it is difficult to figure out how to correctly identify eligible beneficiaries because they need to figure out exactly how to decide whether someone is, by definition, poor, and link these beneficiaries to bank accounts. There also needs to be cooperation between state and federal governments which is currently not happening. This is evident in the situation of inaccessibility of technology in many areas in the countries because it is up to the state governments to figure out a way to make it possible for that to happen. Once citizens have been properly set up with JAM, there are few practical problems that will also arise towards the end of the process. Some poor people in rural areas live too far from banks. There are only 40,000 rural banks for 600,000 rural villages (George). A way to fix this problem is to establish strong cellular networks to give those who live far away adequate access, again requiring cooperation from state governments. (George)
Another program launched by the government in recent years with the aim to improve the economy is called “Make in India”. The main goals “Make in India” was launched to reach were the intentions to make India a platform for global manufacturing, create millions of jobs, and make the conduction of business easier. The policies under Make in India primarily concern the New Initiatives, FDI, Intellectual Property Rights, and National Manufacturing. The New Initiative policy makes doing in business in India significantly easier in terms of increasing speed of transactions and increasing transparency. The government has already implemented policies such as the ability to seek environmental ncome tax returns can be filed online Validity of industrial license is now 3 yrs (Nidhi) Replacing paper registers with electronic ones (Nidhi). Working on attracting Foreign Direct Investment, Investing directly in production in another country, either by buying a company there or establishing new operations of an existing business. (Investopedia) Foreign Direct Investment (FDI) helps raise imports (Kohli)