Economic Policy Reforms

One of the clearest drivers of the UK’s economic stagnation has been weak productivity growth, particularly relative to other major economies such as the US. The chart highlights a stark divergence since the 2008 financial crisis with US output per worker hour rising steadily, whilst the UK equivalent has largely flatlined. This gap reflects a combination of weak business investment, persistent skills shortages, and regulatory and planning constraints that have weighed on economic activity. Reversing this trend is central to any credible UK economic strategy as even modest improvements in productivity growth would have powerful cumulative effects on GDP, tax revenues and debt sustainability. There is no shortage of policy options, but the most compelling revolve around a sustained upturn in public and private investment in infrastructure, energy security and AI adoption. At the same time, a renewed focus on skills, vocational training and labour market participation would help address structural bottlenecks. Taken together, these measures offer the new Prime Minister a viable path to closing the productivity gap and, over time, easing the UK’s substantial fiscal constraints. Disclaimer: For information purposes only and not an offer, solicitation, or recommendation to invest.

Thank you to Bloomberg TV and Haslinda Amin, for the interview over the weekend, to discuss Malaysia's economy and the Ringgit's performance. As she would, Haslinda asked about my prediction for the Ringgit. And as always, I don’t have a straightforward answer for that. Here's why: in a volatile global environment - with shifting tariffs, Fed policy uncertainty, and supply chain realignments - predictions are meaningless. What matters, is our fundamentals. And Malaysia's fundamentals are strong. The Ringgit has strengthened approximately 10% this year. Not because of forecasts or hope, but because of results: RM190 billion in approved investments in the first half of 2025. EPF contributions up 9% year-on-year, signaling robust formal employment. Our fiscal deficit reduced to 3.8% this year, targeting 3.5% in 2026. Inflation among the lowest in ASEAN at 1.4%. These are outcomes of deliberate reforms - targeted diesel and RON95 subsidies that protect households while closing leakages, electricity tariff restructuring that ended blanket subsidies, and consistent policy execution that gives investors clarity. We continue to operate in uncertainty. We can’t control the Fed's decisions. Neither can we control global tariff wars. But we can control our fiscal discipline. We can control how well we execute reforms. We can control whether Malaysia remains an attractive, stable destination for investment. And we can control whether our people are protected as we navigate global headwinds. Reform comes in many ways. The key is to plan it well, execute it well, and make sure it sustains. That's the work. It’s often unglamorous work that doesn’t gain you popularity, but it needs to be done. The ringgit's performance is simply the market's verdict on whether what we're doing is the right thing to do. Even if the Fed slows its rate cuts, the ringgit still has wind behind it - because the fundamentals remain strong. Watch the full interview: https://lnkd.in/gyyr8T2D #EkonomiMADANI #MalaysianEconomy

Europe's economic debate has taken a puzzling turn. While Mario Draghi's report expertly documents the EU's microeconomic barriers to growth, his emphasis on increased borrowing misses the core problem. The evidence shows that Europe's struggles don't stem from insufficient public spending - we've already seen an unprecedented debt explosion over the last decade. The success stories of Greece, Ireland, Portugal, and Cyprus prove what works: genuine structural reforms, not more debt. These countries, forced to implement real changes during the euro crisis, have outperformed the rest of the eurozone in growth and job creation. Meanwhile, high-spending states like France have seen lower growth despite large deficits - to the point where France now pays higher interest rates on its debt than Greece. I argue in Silicon Continent today that Europe needs to focus on removing regulatory barriers, completing the Single Market for services, and implementing pro-market reforms. While there's a place for targeted public investment in areas like defense, debt-fueled industrial policy without addressing fundamental regulatory obstacles will only delay necessary changes and increase our vulnerability to future crises. Read the full analysis: https://lnkd.in/d2-9rPYg

Key Questions for Policymakers & the IMF Team: Are We Fixing the Economy or Just Buying Time? As the IMF team reviews Pakistan’s $7 billion EFF, the government is optimistic about fiscal and external stability. But are we making structural reforms for sustainable growth, or just delaying the next crisis? 1️⃣ Fiscal Deficit: A Real Fix or Temporary Gain? The deficit target was met largely due to one-time central bank profits and non-tax revenues (petroleum levy, telecom profits). With GDP growth below 3%, is this real progress or just the effect of last year’s high interest rates? Why is tax base expansion still lagging? Where are the promised taxes on retail, agriculture, and real estate sectors? 2️⃣ Current Account Surplus: A Success or a Symptom of Stagnation? The surplus is driven by import contraction, not productivity or exports. Why is private sector investment falling? Why hasn’t bank credit demand risen despite lower interest rates? 3️⃣ Privatization: Why No Progress? PIA, DISCOs, and Pakistan Steel Mills remain unsold. What’s delaying their divestment? Can Pakistan afford to keep subsidizing loss-making SOEs, or is privatization being blocked due to lack of political will? 4️⃣ High Taxes & Energy Tariffs: Killing Growth? Excessive taxes and soaring energy tariffs are driving businesses to the informal sector. Why aren’t tax rates reduced and structures being simplified to promote growth instead of suffocating investment? 5️⃣ Digital Transformation: Why Is It Missing from the program? While the entire world is enhancing its productivity driven by AI, automation, and digitization, Pakistan remains stagnant in these essential enablers. Why hasn’t the IMF insisted on digitizing governance, taxation, financial management and the economy? 6️⃣ Governance & Transparency: Real Reform or Just Talk? The Civil Servants Act amendment (digital asset declarations) is positive—but will it be enforced? Where is the push for public financial management reforms to improve transparency? Are we moving to enhance our governance that can generate tangible outcomes? 7️⃣ The Post-IMF Plan: Preventing the Next Crisis? Every past IMF program has helped in stabilization in short-term by reducing growth but has followed by economic deterioration (2017-18, 2022) What’s the strategy to reduce dependence on debt & remittances? Where’s the plan for self-sustaining growth post IMF in 2027/28? 💡 Final Thought: The IMF program may help avoid default during the program period, but without real governance & productivity reforms, Pakistan will be in another crisis post-IMF. Are policymakers and the IMF addressing these core issues—or just kicking the can down the road? 🔹 What do you think? Share your thoughts! ⬇️

🎓 As a university professor, I am deeply concerned about my students' financial future. The policy decisions made over the past 50 years have fundamentally altered the path to financial stability for young Americans. Let me share some sobering data that illustrates why: In 1975, a median home cost $37,200 with household incomes at $11,800 - meaning housing consumed roughly 25% of monthly income. A single income could support a middle-class lifestyle, with a college education being affordable and manageable without crushing debt. After covering essential expenses, families could save 10-15% of their income. Fast forward to today: Our graduates face median home prices of $410,000 against $75,000 household incomes, with housing consuming 30-50% of their income. While nominal incomes have increased 6.4x, key expenses have skyrocketed 11x. Add substantial student debt, soaring healthcare costs, and new essential expenses - most young professionals can barely save 5-10% when possible at all. How did we get here? A cascade of policy decisions: 1. Post-2008 policies enabling institutional investors to dominate housing markets 2. Education reforms making student loans non-dischargeable while federally guaranteeing them 3. Banking deregulation (Glass-Steagall repeal) and monetary policies favoring asset inflation 4. Healthcare consolidation without adequate antitrust enforcement 5. Labor market changes reducing worker bargaining power The result? A system increasingly tilted toward large institutions and existing wealth holders, making traditional paths to financial security nearly impossible for many young Americans. We need urgent policy reform to restore the American Dream for the next generation. Our students deserve better than a system that seems designed to prevent their financial success. Thoughts? What policy changes would you prioritize? #HigherEducation #EconomicPolicy #StudentDebt #AmericanDream #FinancialLiteracy #Economics #Policy

The Government has set the ball rolling by undertaking many #reforms in the recent past, including goods and services tax (#GST) and labour codes. At Confederation of Indian Industry, we believe that this momentum should accelerate through further reforms in areas like power, logistics, labour, land, and #easeofdoing business to keep pace with dynamic global changes. A few immediate ones we recommend - 1.  Boosting #Manufacturing Competitiveness: the way to encourage manufacturing is really to see how we create greater value addition in India. An inter-ministerial group could be established to look at manufacturing competitiveness. Measures such as technology tie-ups, and clear policy frameworks especially on Customs duty rate over the next three to five years can be looked at. Specific products can be identified, for e.g. compressors, wafers, APIs (active pharmaceutical ingredients), and chemicals. 2.  Reducing Production Costs: Addressing high factor costs across land, logistics, power, etc. Privatization of state electricity boards and rationalisation of industrial tariffs by incentivizing states can be undertaken. 3.  Strategic #Disinvestment: Fast-tracking the disinvestment of public sector units and using the proceeds for investments in transformational projects (like high-speed rail) and supporting state reforms is recommended. Free land available with the government can also be developed into industrial parks through PPP models. 4.  Sovereign Wealth Fund Proposal: Creation of a $50 billion sovereign wealth fund, focused on advanced manufacturing and strategic sectors, is suggested to provide risk capital for long-term national interests. 5.  #Tax simplification: The industry calls for further simplification of tax and regulatory processes, more effective dispute resolution. 6.  Ease of doing business: there should be a statute of limitations in all economic laws to reduce uncertainty. Decriminalisation will significantly help improve ease of doing business. Further, Ministries should digitally publish an updated, clear, and comprehensive list of requirements such as fees, timelines, and grievance procedures that one has to follow.

GST 2.0 are more than a rate revision, they are a structural step towards making India’s tax system #simpler, #fairer, and more #growth-oriented. By simplifying #GST to just two slabs - 5% and 18% (with 40% only for luxury and sin goods), the reform eliminates long-standing complexities that often burdened smaller enterprises. This directly lowers input costs, improves margins, and enhances competitiveness in both domestic and export markets. Equally important are the measures to make compliance easier. Pre-filled returns, faster registration, standardised invoicing, and quicker refunds, including provisional refunds of up to 90%, reduce the administrative burden while unlocking working capital. For small businesses, this is more than convenience; it is liquidity that can be channelled into #innovation, #expansion, and #resilience. The impact of reform extends to the #retail sector making goods and services significantly affordable. This is expected to boost consumer demand, increase sales, and create new opportunities for lenders driving a multiplier effect across both credit growth and broader consumption. GST 2.0 is not just about reducing tax rates, it is about reshaping the environment in which businesses and consumers can thrive. By empowering MSMEs, simplifying compliance, and unlocking demand in key sectors, this reform goes beyond incremental change. It positions #India for its next phase of inclusive, innovation-led, and sustainable growth. India’s growth story today is being shaped by multiple tailwinds, 7.8% GDP growth this quarter, a favourable monsoon, easing inflation, and proactive monetary measures through repo and CRR cuts. With GST rationalisation now lowering input costs, the stage is set for businesses and consumers alike to benefit. If this momentum continues, India may well achieve its aspiration of becoming the world’s third-largest economy even earlier than expected. #GSTReform #MSMEs #SMEs #FinancialInclusion #EconomicGrowth #IndiaGrowthStory #EaseOfDoingBusiness #InclusiveGrowth

The current geopolitical turmoil is a reminder that India's economic vulnerabilities persist. Reducing dependence crude oil and gold, strengthening innovation, improving regulatory certainty, and building resilience cannot wait for the next crisis. In my latest piece for The Economic Times, I outline five reforms that deserve urgent attention. • Reduce dependence on imported gold and crude oil by deepening domestic gold markets and accelerating the transition to electric mobility. • Attract stable, long-term foreign capital by making India's investment regime more competitive. • Curb frivolous tax demands and improve accountability in tax administration. • Resolve the growing GST litigation burden that locks up capital and creates uncertainty for businesses. • Invest more aggressively in research and innovation to build technological self-reliance.

𝐓𝐡𝐞 𝐐𝐮𝐢𝐞𝐭 𝐑𝐞𝐟𝐨𝐫𝐦 𝐓𝐡𝐚𝐭 𝐖𝐢𝐥𝐥 𝐑𝐞𝐬𝐡𝐚𝐩𝐞 𝐈𝐧𝐝𝐢𝐚’𝐬 𝐄𝐧𝐭𝐫𝐞𝐩𝐫𝐞𝐧𝐞𝐮𝐫𝐢𝐚𝐥 𝐄𝐜𝐨𝐧𝐨𝐦𝐲 — 𝐖𝐡𝐚𝐭 𝐅𝐨𝐮𝐧𝐝𝐞𝐫𝐬, 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 & 𝐏𝐨𝐥𝐢𝐜𝐲𝐦𝐚𝐤𝐞𝐫𝐬 𝐌𝐮𝐬𝐭 𝐊𝐧𝐨𝐰 On 1st December 2025, India quietly executed one of its most consequential compliance reforms. No fanfare. No headlines. But 𝟓𝟎,𝟎𝟎𝟎+ companies were immediately shifted into a lighter, faster, more founder-friendly regulatory regime. The Ministry of Corporate Affairs expanded the definition of a Small Company: 𝐁𝐞𝐟𝐨𝐫𝐞: ₹4 Cr capital / ₹40 Cr turnover 𝐍𝐨𝐰: ₹10 Cr capital / ₹100 Cr turnover 𝟐.𝟓𝐗 𝐣𝐮𝐦𝐩 that fundamentally changes how India builds, scales, and consolidates businesses. 𝐖𝐡𝐚𝐭 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐅𝐨𝐮𝐧𝐝𝐞𝐫𝐬 You finally get what the entrepreneurial journey desperately needs: 𝐭𝐢𝐦𝐞 𝐚𝐧𝐝 𝐛𝐚𝐧𝐝𝐰𝐢𝐝𝐭𝐡. Reduced compliance pressure Simpler audits Lower governance overhead More oxygen for product, revenue, and team-building In a market where agility defines survival, this is a game-changer. 𝐖𝐡𝐚𝐭 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐈𝐧𝐯𝐞𝐬𝐭𝐨𝐫𝐬 (𝐕𝐂, 𝐏𝐄, 𝐂𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞) A significantly larger universe of companies now qualifies for 𝐟𝐚𝐬𝐭-𝐭𝐫𝐚𝐜𝐤 𝐦𝐞𝐫𝐠𝐞𝐫𝐬 𝐚𝐧𝐝 𝐚𝐦𝐚𝐥𝐠𝐚𝐦𝐚𝐭𝐢𝐨𝐧𝐬. This unlocks: Faster deal closures Lower execution risk Cheaper diligence cycles Smoother consolidation pathways Better exit opportunities India’s M&A engine just became more fluid and efficient. 𝐖𝐡𝐚𝐭 𝐓𝐡𝐢𝐬 𝐌𝐞𝐚𝐧𝐬 𝐟𝐨𝐫 𝐏𝐨𝐥𝐢𝐜𝐲𝐦𝐚𝐤𝐞𝐫𝐬 This reform aligns regulation with India’s new economic architecture — where sub–₹100 crore companies are not “small,” they are 𝐢𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐞𝐧𝐠𝐢𝐧𝐞𝐬. It reflects a principle I often speak about globally: 𝐑𝐞𝐠𝐮𝐥𝐚𝐭𝐢𝐨𝐧 𝐦𝐮𝐬𝐭 𝐩𝐫𝐨𝐭𝐞𝐜𝐭 𝐭𝐫𝐮𝐬𝐭 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐬𝐥𝐨𝐰𝐢𝐧𝐠 𝐩𝐫𝐨𝐠𝐫𝐞𝐬𝐬. This is Ease of Doing Business in action. This is policy catching up with entrepreneurial velocity. 𝐀 𝐪𝐮𝐢𝐞𝐭 𝐫𝐞𝐟𝐨𝐫𝐦 — 𝐛𝐮𝐭 𝐚 𝐭𝐫𝐚𝐧𝐬𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐯𝐞 𝐨𝐧𝐞. My appreciation to: Hon'ble PM Narendra Modi, Hon'ble Finance & Corporate Affairs Minister Nirmala Sitharaman, and the MCA leadership, Piyush Goyal for a reform that strengthens India’s founders, energises investors, and modernises our compliance architecture. If you’re a founder, investor, or ecosystem builder — the landscape has shifted in your favour. Leverage it. Ministry Of Corporate Affairs Indian Ministry of Finance MeitY Startup Hub Department of Science & Technology, Government of India Startup Incubation and Innovation Centre, IIT Kanpur (incubatoriitk) equentis GrowthCap Ventures https://lnkd.in/gPyfTqGN

India’s GST just got a festive makeover… And it impacts households, farmers, MSMEs, and industries alike. The Government has announced Next-Gen GST Reforms - a rationalised, simplified tax system that feels like the reset many were waiting for. Here’s what changes on the ground: - Daily essentials like toothpaste, soaps, butter, ghee, and packaged food drop from 12-18% to 5%. Relief straight to the household budget. - Healthcare & insurance: Diagnostic kits, test strips, and even corrective spectacles now attract just 5%, while health & life insurance premiums are fully exempt. -Education gets a boost: notebooks, pencils, maps, and charts are zero-rated - making learning tools more affordable. -Agriculture & MSMEs: Tractors, irrigation systems, and bio-pesticides reduced from 12% to 5% - a direct productivity push for farmers. -Automobiles & appliances: From cars and bikes to ACs, TVs, and washing machines - rates trimmed from 28% to 18%. Expect demand revival here. And the reforms go beyond rates. Automatic registration in 3 days, risk-based refunds, and clarity in classification mean businesses - especially MSMEs - will spend less time on compliance and more on growth. The bigger picture? - Cheaper essentials fuel consumption. - Lower costs ease pressure on families. - Simpler processes boost business confidence. This isn’t just a tax reform. It’s a structural shift that touches everyday life while strengthening economic momentum. Do you think these GST reforms will succeed in driving affordability and growth at the same time?