GST biggest reform of Modi era, but one nation, one election is next big need: FICCI President
What happened
FICCI President Anant Goenka highlighted GST as Modi government's biggest reform during 12-year tenure commemoration. He positioned 'One Nation, One Election' as the next critical structural reform needed. GST, implemented July 2017, unified India's fragmented indirect tax system into single framework. FICCI emphasized continuing economic reforms beyond tax restructuring. Goenka's statement reflects business community's perspective on policy priorities for India's growth trajectory and administrative efficiency enhancement.
Why it matters
FICCI's positioning of GST and One Nation One Election reflects the business community's assessment of structural reforms impacting India's economic framework. GST eliminated the cascading tax effect across states, creating a unified national market worth $3.7 trillion. The reform simplified compliance from multiple state VATs, central excise, and service tax into a single digital platform. However, initial implementation challenges included rate rationalization, input tax credit issues, and MSME compliance burdens. One Nation One Election represents the next governance reform, potentially saving thousands of crores spent on frequent elections and reducing policy uncertainty. FICCI's advocacy indicates industry preference for predictable policy cycles over fragmented electoral mandates. The reform could enable longer-term economic planning, reduce populist spending spikes during election periods, and improve administrative focus on development rather than electioneering. This business perspective aligns with government's efficiency agenda but faces constitutional and federal structure challenges requiring broad political consensus.
Government Extends Validity of Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0), Increases Loan Limits under the scheme
What happened
Government extends Credit Guarantee Scheme for Microfinance Institutions-2.0 (CGSMFI-2.0) validity till March 2026, increasing loan limits from ₹10 lakh to ₹50 lakh for individual borrowers and ₹25 lakh to ₹1.25 crore for group loans. The scheme, operated through National Credit Guarantee Trustee Company Limited (NCGTC), provides 75% guarantee coverage to lenders. Extension aims to enhance credit access for underserved populations, particularly women entrepreneurs and rural communities, supporting financial inclusion goals.
Why it matters
CGSMFI-2.0 represents government's commitment to deepening financial inclusion through risk mitigation for lenders serving microfinance sector. The scheme addresses the fundamental challenge where traditional banks hesitate to lend to microfinance institutions due to perceived higher risks and lack of conventional collateral from end borrowers. By providing 75% credit guarantee, government effectively de-risks lending, encouraging banks and NBFCs to expand credit to MFIs who then serve the last-mile customers. The substantial increase in loan limits—from ₹10 lakh to ₹50 lakh for individuals and ₹25 lakh to ₹1.25 crore for groups—reflects evolving credit needs of micro-entrepreneurs who have graduated from subsistence to growth-oriented activities. This is particularly significant for women's self-help groups and joint liability groups that form the backbone of India's microfinance ecosystem. The scheme's extension till March 2026 provides policy continuity crucial for long-term planning by MFIs and their banking partners. It aligns with government's broader financial inclusion agenda, complementing schemes like Pradhan Mantri Jan Dhan Yojana and Stand-Up India, creating a comprehensive ecosystem for bottom-of-pyramid financing.
