After BJP-led NDA has received a landslide mandate in the just-concluded Lok Sabha elections with the saffron party winning 303 of the 542 seats that went to polls this time, Narendra Modi is set to assume the charge as prime minister for a second time on Thursday.
CNBC-TV18 reporters have done an in-depth analysis of agenda for several ministries and departments in the government and one of the focus areas of the second Modi government will be reviving special economic zones (SEZs).
First, the government will be looking to implement several recommendations of the Baba Kalyani panel, which was formed by the union commerce ministry last year to evaluate the SEZ policy.
The Kalyani panel had proposed migration of SEZs to employment and economic enclaves (EEEs) and creation of link infrastructure and maintenance for enclaves. The other recommendations include changes in the SEZ Act, but that will require changing of legislation. The SEZ Act, 2005, supported by SEZ rules, came into effect on February 10, 2006.
In the immediate term, one can expect a change in foreign trade-related issues as the high-level advisory group (HLAG) on trade headed by Surjit Bhalla has asked the government to implement all recommendations of the panel immediately.
According to HLAG, foreign individuals should be allowed to invest in India debt and capital market with norms identical to the Liberalised Remittance Scheme (LRS) scheme of the Reserve Bank of India (RBI), giving infrastructure status to the tourism sector and make sure that top 10 global textile companies invest in India.
To promote research and development, the HLAG had proposed that the government should retain 150 percent tax credit and raise it to 200 percent for long-term research and development projects.