PM Modi's economic reforms: Demonetisation, GST, PLI and financial inclusion schemes analyzed for UPSC

Livemint - Economy · 20 Sept 2026 · 2 min read
Prelims · Economy Mains · GS3 Economy High relevance

PM Modi's tenure since 2014 has witnessed major economic reforms including demonetisation, GST implementation, PLI scheme and Jan Dhan Yojana, which have transformed India's economic landscape and governance framework.

Key points

Demonetisation: Announced on 8 November 2016, this move invalidated ₹500 and ₹1,000 notes to combat black money, counterfeit currency and terror financing, later leading to RBI's Clean Note Policy withdrawal of ₹2,000 notes in 2023.

Goods and Services Tax (GST): Implemented on 1 July 2017, GST replaced multiple indirect taxes with a unified system, creating a single national market and reducing tax cascading, with subsequent rationalization to 5% and 18% slabs in 2025.

Pradhan Mantri Jan Dhan Yojana (PMJDY): Launched in August 2014, this financial inclusion scheme provides banking services, credit, insurance and pensions to unbanked households, significantly expanding formal financial access.

Make in India: Focused on boosting manufacturing through four pillars - new processes, infrastructure, sectors and mindset - with business environment reforms like de-licensing and deregulation.

Pradhan Mantri MUDRA Yojana (PMMY): Provides collateral-free loans up to ₹20 lakh for non-farm small businesses through various financial institutions, supporting entrepreneurship since 2015.

Production Linked Incentive (PLI) Scheme: Launched in 2020 with ₹1.97 lakh crore outlay across 14 sectors to boost manufacturing, with 806 applications approved showing strong industry adoption.

[GS3-Economy] These reforms collectively aim to formalize the economy, boost manufacturing under Atmanirbhar Bharat, and create an integrated national market, addressing key challenges in India's economic growth trajectory.

[GS2-Governance] The implementation of these schemes demonstrates a shift towards technology-driven, centralized governance models with direct benefit transfers, altering traditional federal governance dynamics.

Way Forward: Strengthen GST Council's federal coordination, expand PLI to more labor-intensive sectors, integrate PMJDY with skill development programs, and establish robust impact assessment mechanisms for future reforms.

Key terms

Pradhan Mantri Jan Dhan Yojana (PMJDY)

A national financial inclusion mission launched in 2014 providing banking services to unbanked households. For UPSC, it's significant for understanding financial inclusion, direct benefit transfer mechanisms and poverty alleviation strategies.

Demonetisation

The sudden withdrawal of specific currency notes as legal tender, implemented in India in 2016 to curb black money, counterfeit currency and terror financing. For UPSC, it's significant for understanding monetary policy, informal economy formalization and its socio-economic impacts.

Goods and Services Tax (GST)

A comprehensive indirect tax levied on manufacture, sale and consumption of goods/services nationwide, implemented in India in 2017. For UPSC, it's crucial for understanding fiscal federalism (through GST Council), economic integration and tax administration reforms.

Production Linked Incentive (PLI) Scheme

A performance-linked incentive scheme launched in 2020 to boost domestic manufacturing under Atmanirbhar Bharat. For UPSC, it's important for industrial policy, global value chain integration and sector-specific growth strategies.