Modi is world's 9th most powerful person: Forbes

Prime Minister Narendra Modi has been ranked as the world’s ninth most powerful person by Forbes magazine in a 2015 list which is topped by Russian President Vladimir Putin.

Mr. Modi was placed 14th in the 2014 Forbes list of world’s powerful people.

Forbes while releasing the list today at the same time said governing 1.2 billion people in India requires more than “shaking hands” and that Mr. Modi must pass his party BJP’s reform agenda and keep “fractious opposition” under control.

German Chancellor Angela Merkel is at the second spot followed by US President Barack Obama (third) and Pope Francis (fourth) and Chinese President Xi Jinping (fifth).

Apart from Mr. Modi who is at the ninth position, others in the top ten are Microsoft Founder Bill Gates at the sixth place, US Federal Reserve Chairperson Janet Yellen (7), UK Prime Minister David Cameron (8) and Google’s Larry Page(10)

About Mr. Modi, the magazine said that India’s “populist” Prime Minister presided over 7.4 per cent GDP growth in his first year in office, and “raised his profile” as a global leader during official visits with Barack Obama and Xi Jinping.

“A barnstorming tour of Silicon Valley reinforced his nation’s massive importance in tech. But governing 1.2 billion people requires more than shaking hands: Now Modi must pass his party’s reform agenda and keep fractious opposition under control,” it said.

To compile the list of world’s most powerful people, the magazine said it considered hundreds of candidates from various walks of life all around the globe, and measured their power along four dimensions. They are whether the candidate has power over lots of people, financial resources controlled by each person, whether the candidate is powerful in multiple spheres and whether the candidates actively used their power.

Ayurveda Prakriti - The Three Doshas, have been Correlated with Genomic Structures in a Research Study

Ayurveda Prakriti - The Three Doshas, have been Correlated with Genomic Structures in a Research Study

A genome-wide study indicated certain correlation between Ayurvedic prakriti classifications with genomic diversity.  A study on the subject has been done by the Centre for Cellular & Molecular Biology (CCMB), Hyderabad a premier research organization of Council for Scientific and Industrial Research with the collaboration of other national research institutes.

A research team at the CCMB under the leadership of Dr. Thangaraj, has taken up the mega program. Well-trained Ayurvedic physicians screened about 3400 people and the same sets of people were also screened by software called AyuSoft developed by C-DAC, Bangalore. 

Ayurvedic physicians believe that there are three doshas or biological energies / humors found in the human body.  Ancient Indians believed that everything that we see is made up of five elements – Space, Air, Fire, Water and Earth.  Vata is related to elements of space and air; pittha is related to elements of fire and water and kapha is related to elements of water and earth.  Each individual would have different levels of these three doshas, hence the diversity.  However, each person can be classified, belonging to one or the other type, if one of the doshas predominates.

People whose Prakriti was in concurrence between the assessment by the Ayurvedic physician and by AyuSoft were recruited for the study.  Their blood samples were collected by respective participating labs. Isolation of DNA and genomic studies were carried out at CCMB using Affymetrix 6.0 SNP chip. This chip brings out single nucleotide difference in the genome among the tested samples.  When the data is plotted, interestingly they fell into three groups, establishing the molecular basis for ancient classification. 

Whether such phenotypic classification has any molecular basis has been a matter of debate for some time.  A few groups attempted to answer this question and found some correlation when they looked at one or two specific genes.  However, the association of genomic variations with prakriti classification was lacking.

This is the first genome-wide study to establish such correlation between Ayurvedic prakriti classifications with genomic diversity.  Analysis of these single nucleotide polymorphisms (SNPs) revealed that about 52 genes might be responsible for specifying the individual's doshas or prakritis.  Dr. Thangaraj and his group has taken this study further and attempted to see if the samples collected randomly, without any information on their prakriti, would also fall into three groups after the analysis based on the 52 SNPs, which appear to be important.

Director-CCMB Dr. Ch. Mohan Rao said that this study would help to identify the prakriti of a person based on her/his genome. “This is a major breakthrough linking our ancient wisdom with modern science”. He also said that this work will inspire many more such studies. These studies should eventually lead to establishing Ayurveda on sound footing along with modern medicine.

These studies were recently published in an Open Access Journal, Science Reports, of Nature group of publications. It can be accessed at: http://www.nature.com/articles/srep15786

Gold Monetisation Scheme (GMS), Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme

PM to launch Gold Related Schemes on 5th November, 2015; First ever National Gold Coin minted in India with National Emblem of Ashok Chakra engraved to be released among others on the occasion

The Prime Minister Shri Narendra Modi will launch the three Gold related Schemes i.e. Gold Monetisation Scheme (GMS), Gold Sovereign Bond Scheme and the Gold Coin and Bullion Scheme on Thursday, 5^thNovember, 2015 in the national capital.

The salient features of each of the aforesaid scheme are as follows:

Gold Monetisation Scheme (GMS), 2015

The GMS will replace the existing Gold Deposit Scheme, 1999. However, the deposits outstanding under the Gold Deposit Scheme will be allowed to run till maturity unless the depositors prematurely withdraw them.

 Resident Indians (Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under the scheme. The minimum deposit at any one time shall be raw gold (bars, coins, jewellery excluding stones and other metals) equivalent to 30 grams of gold. There is no maximum limit for deposit under the scheme.

 The gold will be accepted at the Collection and Purity Testing Centres (CPTC) certified by Bureau of Indian Standards (BIS). The deposit certificates will be issued by banks in equivalent  of 995 fineness of gold. The designated banks will accept gold deposits under the Short Term (1-3 years) Bank Deposit (STBD) as well as Medium (5-7 years) and Long (12-15 years) Term Government Deposit Schemes (MLTGD). While the former will be accepted by banks on their own account, the latter will be on behalf of the Government of India. There will be provision for premature withdrawal subject to a minimum lock-in period and penalty to be determined by individual banks for the STBD. The interest rate  in the STBD will be determined by the banks. The interest rate in the medium term bonds has been fixed at 2.25% and for the long term bonds is 2.5% for the bonds issued in 2015-16.

Interest on deposits under the scheme will start accruing from the date of conversion of gold deposited into tradable gold bars after refinement or 30 days after the receipt of gold at the CPTC or the bank’s designated branch, as the case may be and whichever is earlier. During the period from the date of receipt of gold by the CPTC or the designated branch, as the case may be, to the date on which interest starts accruing in the deposit, the gold accepted by the CPTC or the designated branch of the bank shall be treated as an item in safe custody held by the designated bank.

The Short Term Bank Deposits will attract applicable Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). However, the stock of gold held by the banks will count towards the general SLR requirement. The opening of Gold Deposit Accounts will be subject to the same rules with regard to customer identification (KYC) as are applicable to any other deposit account.

The designated banks may sell or lend the gold accepted under STBD to MMTC for minting India Gold Coins (IGC) and to jewellers, or sell it to other designated banks participating in GMS. The gold deposited under MLTGD will be auctioned by MMTC or any other agency authorised by the Central Government and the sale proceeds credited to the Central Government’s account with the Reserve Bank of India. The entities participating in the auction may include the Reserve Bank, MMTC, banks and any other entities notified by the Central Government. Banks may utilise the gold purchased in the auction for purposes indicated above. Designated banks should put in place a suitable risk management mechanism, including appropriate limits, to manage the risk arising from gold price movements in respect of their net exposure to gold. For this purpose, they have been allowed to access the international exchanges, London Bullion Market Association or make use of over-the-counter contracts to hedge exposures to bullion prices subject to the guidelines issued by the Reserve Bank.

Complaints against designated banks regarding any discrepancy in issuance of receipts and deposit certificates, redemption of deposits, payment of interest will be handled first by the bank’s grievance redress process and then by the Reserve Bank’s Banking Ombudsman.

It may be recalled that the Government of India announced the Gold Monetisation Scheme vide its Office Memorandum F.No.20/6/2015-FT dated September 15, 2015. The objective of the Scheme is to mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and in the long run, to reduce country’s reliance on the import of gold..

 The list of CPTCs and Refiners are certified by the Bureau of Indian Standards. Indian Banks Association has finalized the necessary documentation including the tripartite agreements between the designated banks, CPTCs and the Refiners under the Scheme. Banks have put in place the requisite systems and procedures to implement the scheme and will continue to improve them.

Sovereign Gold Bond Scheme

The Government of India has decided to issue Sovereign Gold Bonds. The Bonds will be issued in multiple tranches subject to the overall borrowing limits of GOI. Applications for the bond under the first tranche will be accepted from November 05, 2015 to November 20, 2015. The Bonds will be issued on November 26, 2015. The Bonds will be sold through banks and designated post offices as notified. It may be recalled that the Union Finance Minister had announced in Union Budget 2015-16 about developing a financial asset, Sovereign Gold Bond, as an alternative to purchasing metal gold.

Sovereign Gold Bond will be issued by Reserve Bank India on behalf of the Government of India. The Bonds will be restricted for sale to resident Indian entities including individuals, HUFs, trusts, Universities, charitable institutions. The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the Bond will be for a period of 8 years with exit option from 5th year to be exercised on the interest payment dates. Minimum permissible investment will be 2 units (i.e. 2 grams of gold).The maximum amount subscribed by an entity will not be more than 500 grams per person per fiscal year (April-March). A self-declaration to this effect will be obtained. A mechanism will be put in place for internal verification of the self declarations.

In case of joint holding, the investment limit of 500 grams will be applied to the first applicant only. Each tranche will be kept open for a period to be notified. The issuance date will also be specified in the notification. Price of Bond will be fixed in Indian Rupees on the basis of the previous week’s (Monday–Friday) simple average of closing price of gold of 999 purity published by the India Bullion and Jewellers Association Ltd. (IBJA).Payment for the Bonds will be through electronic funds transfer/cash payment/ cheque/ demand draft. The investors will be issued a Stock/Holding Certificate.

 The Bonds are eligible for conversion into demat form. The redemption price will be in Indian Rupees based on previous week’s (Monday-Friday) simple average of closing price of gold of 999 purity published by IBJA. Bonds will be sold through banks and designated Post Offices, as notified, either directly or through agents. The investors will get interest at a  fixed rate of 2.75 per cent per annum payable semi-annually on the initial value of investment for the bonds issued in 2015-16.

Bonds can be used as collateral for loans. The loan-to-value (LTV) ratio is to be set equal to ordinary gold loan mandated by the Reserve Bank from time to time. Know-your-customer (KYC) norms will be the same as that for purchase of physical gold. KYC documents such as Voter ID, Aadhaar Card/PAN or TAN /Passport will be required. The interest on Gold Bonds shall be taxable as per the provision of Income Tax Act, 1961 (43 of 1961) and the capital gains tax shall also remain same as in the case of physical gold. Department of Revenue has agreed to ensure tax neutrality between the purchase of physical gold and investment in the gold bonds. This will require amendments in the existing provisions of the Income Tax act , which will be considered in the 2016-17 Budget. Bonds will be tradable on exchanges/NDS-OM from a date to be notified by RBI..The Bonds will be eligible for Statutory Liquidity Ratio (SLR). Commission for distribution shall be paid at the rate of 1% of the subscription amount.

Gold Coin/Bullion Scheme

The Indian gold coin & bullion is a part of the Gold Monetisation Programme. The coin will be the first  ever national gold coin minted in India and will have the National Emblem of Ashok Chakra engraved  on one side and Mahatma Gandhi on the other side . Initially the coins will be available in denominations of 5 and 10 grams. A 20 gram bullion will also be available. Initially, 15,000 coins of 5gm, 20,000 coins of 10 gm and 3,750 of  bullions of 20 gm  will be made available through MMTC outlets. The Indian Gold coin & bullion is unique in many aspects and will carry advanced anti-counterfeit features and tamper proof packaging.

The Indian Cold coin & bullion will be of 24 karat purity and 999 fineness. All coins & bullion will be hallmarked as per the BIS standards. These coins will be distributed initially through designated & recognised MMTC outlets and later through specified bank branches and post offices.

Summary of the Recommendations of the Bankruptcy Law Reforms Committee (BLRC)

Summary of the Recommendations of the Bankruptcy Law Reforms Committee (BLRC)

Following is the Summary of the Recommendations of the Bankruptcy Law Reforms Committee (BLRC)

The Report of the BLRC is in two parts:

i.                    Rationale and Design/Recommendations;

ii.                  A comprehensive draft Insolvency and Bankruptcy Bill covering all entities.

 The draft Bill has consolidated the existing laws relating to insolvency of companies, limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals which are presently scattered in a number of legislations, into a single legislation. The committee has observed that the enactment of the proposed Bill will provide greater clarity in the law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt and will address the challenges being faced at present for swift and effective bankruptcy resolution. The Bill seeks to improve the handling of conflicts between creditors and debtors, avoid destruction of value, distinguish malfeasance vis-a-vis business failure and clearly allocate losses in macroeconomic downturns.

 The major recommendations of the Report are as follows:

i.                    Insolvency Regulator: The Bill proposes to establish an Insolvency Regulator to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and informational utilities.

ii.                  Insolvency Adjudicating Authority: The Adjudicating Authority will have the jurisdiction to hear and dispose of cases by or against the debtor.

a.       The Debt Recovery Tribunal (“DRT”) shall be the Adjudicating Authority with jurisdiction over individuals and unlimited liability partnership firms. Appeals from the order of DRT shall lie to the Debt Recovery Appellate Tribunal (“DRAT”).

b.  The National Company Law Tribunal (“NCLT”) shall be the Adjudicating Authority with jurisdiction over companies, limited liability entities. Appeals from the order of NCLT shall lie to the National Company Law Appellate Tribunal (“NCLAT”).

 c.  NCLAT shall be the appellate authority to hear appeals arising out of the orders       passed by the Regulator in respect of insolvency professionals or information utilities.

iii.                Insolvency Professionals: The draft Bill proposes to regulate insolvency professionals and insolvency professional agencies. Under Regulator’s oversight, these agencies will develop professional standards, codes of ethics and exercise a disciplinary role over errant members leading to the development of a competitive industry for insolvency professionals.

iv.                 Insolvency Information Utilities: The draft Bill proposes for information utilities which would collect, collate, authenticate and disseminate financial information from listed companies and financial and operational creditors of companies. An individual insolvency database is also proposed to be set up with the goal of providing information on insolvency status of individuals.

v.                   Bankruptcy and Insolvency Processes for Companies and Limited Liability Entities: The draft Bill proposes to revamp the revival/re-organisation regime applicable to financially distressed companies and limited liability entities; and the insolvency related liquidation regime applicable to companies and limited liability entities.

a. The draft Bill lays down a clear, coherent and speedy process for early identification of financial distress and revival of the companies and limited liability entities if the underlying business is found to be viable.

 b. The draft Bill prescribes a swift process and timeline of 180 days for dealing with applications for insolvency resolution. This can be extended for 90 days by the Adjudicating Authority only in exceptional cases. During insolvency resolution period (of 180/270 days), the management of the debtor is placed in the hands of an interim resolution professional/resolution professional.

 c. An insolvency resolution plan prepared by the resolution professional has to be approved by a majority of 75% of voting share of the financial creditors. Once the plan is approved, it would require sanction of the Adjudicating Authority. If an insolvency resolution plan is rejected, the Adjudicating Authority will make an order for the liquidation.

 d. The draft Bill also provides for a fast track insolvency resolution process which may be applicable to certain categories of entities. In such a case, the insolvency resolution process has to be completed within a period of 90 days from the trigger date. However, on request from the resolution professional based on the resolution passed by the committee of creditors, a one-time extension of 45 days can be granted by the Adjudicating Authority. The order of priorities [waterfall] in which the proceeds from the realisation of the assets of the entity are to be distributed to its creditors is also provided for.

vi.              Bankruptcy and Insolvency Processes for Individuals and Unlimited Liability Partnerships: The draft Bill also proposes an insolvency regime for individuals and unlimited liability partnerships also. As a precursor to a bankruptcy process, the draft Bill envisages two distinct processes under this Part, namely, Fresh Start and Insolvency Resolution.

a.               In the Fresh Start process, indigent individuals with income and assets lesser than specified thresholds (annual gross income does not exceed Rs. 60,000 and aggregate value of assets does not exceed Rs.20,000) shall be eligible to apply for a discharge from their “qualifying debts” (i.e. debts which are liquidated, unsecured and not excluded debts and up to Rs.35,000). The resolution professional will investigate and prepare a final list of all qualifying debts within 180 days from the date of application. On the expiry of this period, the Adjudicating Authority will pass an order on discharging of the debtor from the qualifying debts and accord an opportunity to the debtor to start afresh, financially.

b.             In the Insolvency Resolution Process, the creditors and the debtor will engage in negotiations to arrive at an agreeable repayment plan for composition of the debts and affairs of the debtor, supervised by a resolution professional.

c.                   The bankruptcy of an individual can be initiated only after the failure of the resolution process. The bankruptcy trustee is responsible for administration of the estate of the bankrupt and for distribution of the proceeds on the basis of the priority.

vii.   Transition Provision: The draft Bill lays down a transition provision during which the Central Government shall exercise all the powers of the Regulator till the time the Regulator is established. This transition provision will enable quick starting of the process on the ground without waiting for the proposed institutional structure to develop.

      viii.             Transfer of proceedings: Any proceeding pending before the AAIFR or the BIFR under the SICA, 1985, immediately before the commencement of this law shall stand abated. However, a company in respect of which such proceeding stands abated may make a reference to Adjudicating Authority within 180 days from the commencement of this law

President to launch ‘Imprint India’ tomorrow

President to launch ‘Imprint India’ tomorrow

‘IMPRINT India’, a Pan-IIT and IISc joint initiative to develop a roadmap for research to solve major engineering and technology challenges in ten technology domains relevant to India will be launched by the President of India, Shri Pranab Mukherjee  tomorrow (November 5, 2015) at Rashtrapati Bhavan.  The launch will be done at a function being held as part of the Visitor’s Conference. 

Prime Minister Narendra Modi will release the IMPRINT India brochure and hand over the first copy to the President of India.  Union Minister of Human Resource Development Smt. Smriti Zubin Irani will also address the gathering. 

The idea of launching ‘IMPRINT India’ originated during the conference of Chairmen, Board of Governors and Directors of Indian Institutes of Technology convened by the President at Rashtrapati Bhavan on August 22, 2014. It is based on the Prime Minister’s suggestion that research done by institutions of national importance must be linked with immediate requirements of the society at large. 

The objectives of this initiative is to  (1) identify areas of immediate relevance to society requiring innovation, (2) direct scientific research into identified areas, (3) ensure higher funding support for research into these areas and (4) measure outcomes of the research effort with reference to impact on the standard of living in the rural/urban areas.

            IMPRINT India will focus on ten themes with each to be coordinated by one IIT/IISc, namely:-

(a) Health Care - IIT Kharagpur,

(b) Computer Science and ICT – IIT Kharagpur,

(c) Advance Materials – IIT Kanpur,

(d) Water Resources and River systems – IIT Kanpur,

(e) Sustainable Urban Design – IIT Roorkee,

(f) Defence – IIT Madras,

(g) Manufacturing – IIT Madras,

(h) Nano-technology Hardware- IIT Bombay,

(i) Environmental Science and Climate Change – IISc, Bangalore and

(j) Energy Security – IIT Bombay. 

The ten coordinating institutions have done extensive consultations and arrived at specific themes in each area of research that has immediate social relevance.  IMPRINT India is being launched during the Visitor’s Conference so that wide discussion can be held amongst the academic community leading to further scientific collaboration between various institutions in these areas.  The top research community from acrossCentral Universities, IITs, NITs, IISc, Bangalore, IISERs, IIITs, NIPERs, NIFT, IIEST, Shibpur, RGIPT, Rae Bareli, RGNIYD, Sreperumbudur, School of Planing and Architecture Bhopal and New Delhi and senior government officials  will attend the function when ‘IMPRINT India’ will be launched as well as the Visitor’s Conference where follow up discussions will be held.  

The fraught politics of the Trans-Pacific Partnership

Last month, 12 countries on both sides of the Pacific finalized the historic Trans-Pacific Partnership (TPP) trade agreement. The scope of the TPP is vast. If ratified and implemented, it will have a monumental impact on trade and capital flows along the Pacific Rim. Indeed, it will contribute to the ongoing transformation of the international order. Unfortunately, whether this will happen remains uncertain.

The economics of trade and finance that form the TPP’s foundations are rather simple, and have been known since the British political economist David Ricardo described them in the 19th century. By enabling countries to make the most of their comparative advantages, the liberalization of trade and investment provides net economic benefits, although it may hurt particular groups that previously benefited from tariff protections.

But the politics of trade liberalization—that is, the way in which countries proceed to accept free trade—is much more complex, largely because of those particular groups it hurts. For them, the overall economic benefits of trade liberalization matter little, if their own narrow interests are being undercut. Even if these groups are relatively small, the discipline and unity with which they fight trade liberalization can amplify their political influence considerably—especially if a powerful political figure takes up their cause.

That is what is now happening in the United States. Former secretary of state Hillary Clinton undoubtedly understands the economics of the TPP, which she once called the “gold standard” in trade agreements. But now that she is on the presidential campaign trail, she has changed her tune.

The reason is apparent: she has judged that she cannot afford to lose the support of American trade unions such as the United Automobile Workers, whose members fear a reduction in tariffs on car and trucks.

This shift may make sense politically, but it is abysmal economics. In reality, the TPP is a great bargain for the US. The concessions it contains on manufactured products like automobiles are much smaller than those on, say, agricultural products, which will involve profound sacrifices from other TPP countries, such as Japan. After all, existing tariff levels on manufactured goods are already much lower than those on agriculture or dairy products.

In short, with the TPP, the US is catching a big fish with small bait. But the increased trade and investment flows brought about by the TPP’s ratification and implementation will benefit even the countries that must make larger sacrifices.

Japan, for example, will find that the TPP enhances “Abenomics”, the three-pronged economic revitalization strategy introduced by Prime Minister Shinzo Abe in 2012. The third component, or “arrow”, of Abenomics—structural reforms—aims to restore growth by raising productivity. But increasing efficiency in a wide variety of sectors, as Japan must do, can be a long, difficult and piecemeal process, as it involves the upgrading of virtually every technology and process.

By connecting Japan’s industries more closely with those of other countries, the TPP can accelerate this process considerably. Moreover, it can spur faster administrative reform. Simply put, the TPP will amount to a powerful tailwind for Abenomics.

It should be noted that liberalization does involve some economic trade-offs, as protection can, in some areas, serve an important purpose. As the economist Jagdish Bhagwati points out, maintaining increased protections for, say, intellectual property (IP) may encourage research and innovation. At the same time, however, excessive IP protections can deter the proliferation of existing knowledge and the development of high-tech products. In the case of pharmaceuticals, for example, this trade-off can be difficult to navigate. Nonetheless, Bhagwati maintains, when it comes to overall trade and capital movements, freer is better.

Given all of this, one hopes that opposition from political figures like Clinton amounts to naught—an entirely plausible outcome, in Clinton’s case, because the TPP should be enacted before the presidential election in November 2016. This would, to some extent, be in line with the TPP negotiation process, in which the political challenges associated with trade liberalization have been handled remarkably well. It seems that involving so many sectors in so many countries actually made it easier to overcome resistance, as it diffused the opposition and prevented any single specific interest from getting the upper hand.

Of course, that does not mean that the negotiations were easy. On the contrary, trade representatives had to display impressive endurance and patience—for more than five years, for some countries. To enable progress, confidentiality was vital (despite US negotiators’ claims that the discussions were wholly transparent).

Failure to ratify the TPP in all 12 countries would be a major disappointment, not just because of the tremendous amount of effort that has gone into it, but also—and more important—because of the vast economic benefits it would bring to all countries involved.

In Japan, as long as most of the ruling Liberal Democratic Party stands firm in supporting the TPP, it should be ratified. But the situation in the US Congress is more dubious. One hopes that America’s leaders do not miss a golden opportunity to give US businesses—and thus the US economy—a significant boost.

The path to sustainable, long-term growth

India will have to increase the productivity of its economy while ensuring that the benefits and opportunities created by growth are shared by all

When Prime Minister Narendra Modi was elected with a mandate to revive the Indian economy, he brought upon himself and his government a burden of expectation not only to fellow Indians but also to the international community. The world’s largest democracy, as many expected, could be doing more to live up to its enormous potential, and was missing out on an historical opportunity to emerge as a major global economic power player.

One year down the road, the global outlook for India today is optimistic. There has also been considerable improvement in the state of the country’s macroeconomic environment. The nation jumped 16 spots in World Economic Forum’s Competitiveness ranking and also moved up to 130th spot in World Bank’s ease of doing business rankings. It emerged as the top destination for foreign direct investment (FDI) in the first half of 2015, and saw a 32% increase in its brand value in the last year. As IMF chief Christine Lagarde put it at the G-20 finance ministers’ meeting earlier this year, India is among the few bright spots in the global economy.

However, bright spots can fade away, and India is at considerable risk of that happening. Despite India’s relatively strong record in terms of economic growth, there has been a parallel rise in inequality and a growth in urban-rural divide. India continues to have the largest number of poor in the world—approximately 300 million are in extreme poverty—and nearly half of the poor are concentrated in five states with large rural population segments. India’s middle class remains small and getting a job is no guarantee of escaping poverty. Many of the fundamentals underpinning India’s competitiveness remain weak and the needs of many of its citizens remain unmet in terms of access to basic services like heath, sanitation, electricity, and education. Social exclusion has left vast shares of the population behind and resulted in untapped human and economic potential.

To ensure long-term, sustainable growth, India will have to increase the productivity of its economy while ensuring that the benefits and opportunities created by growth are shared by all. While many of the recent policy actions from the government have been towards this direction, a further and faster push is required on five key dimensions:

1. Reform the tax code and expand social protection

India’s social insurance system and its public health system remain limited in coverage and fragmented in character. Out-of-pocket expenses are high, limiting affordability. Insurance coverage (old-age pensions, death and disability insurance, maternity benefits) remain limited. Increasing its narrow tax base can give India the required fiscal space to make these much needed social expenditures, and give its citizens the safety net needed to take risks and participate fully in the economy and society.

2. Improve access to basic infrastructure

A quarter of Indians still do not have access to electricity and almost a third of the urban population lives in slums. Sixty-five per cent of the population does not have access to improved sanitation and access remains unevenly distributed. This is also the case for clean drinking water. In a recent report, the World Bank estimates that India might need up to $1.7 trillion to close its gap in infrastructure development. At the same time, private infrastructure financing totalled only 2.4% of GDP per year on average from 2009-13. Closing the basic infrastructure gap requires a more aggressive push on private investments and public-private partnerships.

3. Make education more equitable and geared towards employment