PM Modi says fundamentals of strong Indian economy, has capacity to recover
Modi, who seems to have taken over efforts to revive the economy, has held up to 12 brainstorming meetings with different stakeholders in recent days on various issues affecting the economy and to overcome appropriate policy interventions in the next budget.
On Thursday, he met with economists, private equity capitalists, business leaders and agriculture experts at Niti Aayog and called for focused efforts from all stakeholders to reach the goal of nearly doubling the size of the Indian economy to $5 trillion by 2024.
“We must all work together and start thinking like a nation,” an official press statement quoted as saying at the meeting.
Modi has spent considerable time personally overseeing the policy matrix to design a rapid change in the Indian economy, which is estimated to grow to 5% in 2019-20, significantly below the 6.8 percent growth rate in the last fiscal and the lowest pace of GDP growth for a full financial year since the global financial crisis in 2008-09.
At Niti Aayog’s pre-budget meeting, Modi called for a focused effort by all stakeholders to achieve the goal of a $5 trillion economy, the statement said.
The Prime Minister said he was happy that the two-hour open discussion had brought to the fore the experience of people on the ground and those working in their respective fields.
It said this would improve synergy between policymakers and various stakeholders.
The idea of a $5 trillion economy is not a sudden development and is based on a deep understanding of the country’s strengths.
“The strong absorbing capacity of the Indian economy shows the strength of the basic foundations of the Indian economy and its ability to recover,” he said, adding sectors such as tourism, urban development, infrastructure and the agricultural industry have great potential to advance the economy and to job creation.
He said that open discussions and brainstorming in those forums led to healthy discussion and understanding of problems.
This would also foster a positive mood and the spirit of “can do” in society, he said.
According to the sources, participants urged the government to focus on credit expansion, export growth, governance of public sector banks (BSPs), increased consumption and job creation. Up to 40 experts and economists attended the meeting.
Modi assured them that he would act on suggestions that could be implemented in the short term and that he would also consider long-term suggestions in due course, as these requirestructural reforms.
In a tweet, Niti Aayog Vice President Rajiv Kumar said the meeting “discussed a wide range of issues related to economic growth, startups and innovation.”
Honourable Prime Minister @narendramodi had an interactive session with economists and industry experts in @NITIAayog today. Disk… https://t.co/12g52zkbQw
— 🇮🇳 Rajiv Kumar (@RajivKumar1) 1578562873000
The high-profile meeting was attended by Interior Minister Amit Shah, road and road transport minister Nitin Gadkari, trade and industry minister Piyush Goyal, as well as Niti Aayog Vice President Rajiv Kumar, CEO Amitabh Kant and other senior think-tank officials.
Bibek Debroy, President of the Prime Minister’s Economic Advisory Council, was also present at the meeting.
Finance Minister Nirmala Sitharaman was not present as she held pre-budget meetings with party workers at BJP headquarters.
The Niti Aayog meeting is important, as the government is making budget proposals for 2020-21. The government will focus on accelerating economic growth, which is estimated to be reduced to a minimum of 11 years of 5% during 2019-20.
The Prime Minister on Monday spoke with leading company tycoons to discuss the problems facing the economy and the measures needed to boost growth and create jobs.
Among others, Niti Aayog’s meeting was attended by The PNV economist Ila Patnaik, former Chief Economic Adviser Shankar Acharya, IGIDR Professor R Broad R Nagraj, KKR CEO India Sanjay Nayar, Ather Energy co-founder and CEO Tarun Mehta, MakeMyTrip CEO Deep Kalra, Dabur India chief Mohit Malhotra, Bandhan Bank CEO and CEO Chandra Shedra Gkharhosh, and Crisil CEO Ashu Suashy.
Sitharaman will present its second EU budget on 1 February.
A key driver of the sharp slowdown in the Indian economy is the slowdown in the manufacturing sector.
In response to the slowdown, the Reserve Bank has significantly softened policy rates during 2019, with a series of rate cuts since February 2019, while the government announced a large reduction in corporate tax rates in September to help boost new investment spending.
The February 1 budget is expected to reveal more measures to boost growth.