After a meeting conducted on last 9th January 2021 by Niti Aayog, all the members agreed strong economic boosts are driven by high-frequency indicators without any doubt, also a bit earlier than thought. Last Friday our PM, Narendra Modi talked about the fiscal measured and reforms associated with it that has been undertaken by our Government after the post-Covid-19 pandemic situation. He held meeting with top-class economists who instigated him to enforce privatization, avoiding challenging international arbitration so that the Government could spend more on infrastructure.
As per economists, they suggested that our Government could take a better view of the fiscal deficit in the forthcoming Budget for 2021-22. Through a virtual meeting, this was suggested and discussed because of the urgency to revive the pandemic stressed economy. All attendants of this virtual meeting rightfully gave their assent that next year there will be a vigorous increase in the growth rate giving India a transformed socio-economic outlook.
It was a long two-hour meeting where Narendra Modi concluded his views that together with a fiscal stimulus, the Government can shape a reform-based stimulus that was previously found in agricultural-related historic reforms, in commercial coal mining and labour laws. The subsequent management after this Covid-19 has thrown up new professional challenges for people around.
Our Prime Minister has said that he always wanted our nation to be integrated into a global supply chain in a way the nation hasn’t witnessed before and created a vision towards Atmanirbhar Bharat. He also assured that the Government commits to developing world-class infrastructure and has highlighted it to the National Infrastructure Pipeline about it. He also discussed the importance of partnerships for achieving goals and how they initiate a crucial role in laying down a broader economic agenda.
Sources have also said that this meeting has urged the Government further to bring out policies to increase exports and build investors’ confidence. One of the sources in this meeting also said that there is a dire need of boosting investor confidence and that the Government should avoid challenging everything. This in turn won’t give any scare to an investor before thinking to invest in any project in India despite other reforms or measures. Speakers have also raised the requirement to increase India’s tax-to-GDP ratio that has fallen since 2008. This again will instil tariff rationalization and undertake recapitalization from banks.
Also, a separate ministry can be created for making assets and PSUs private on need. This meeting also highlighted the importance of enforcing future reform areas and the essentiality to tap household savings for securing long-term funding for infrastructure projects. Also, participants have focused on public health and education investment point to boost the strength of the knowledge economy further.
Finance Minister Nirmala Sitharaman, Minister of State for Finance Anurag Thakur, MoS Planning Rao Inderjit Singh, vice-chairman of Niti Aayog Rajiv Kumar and CEO of Niti Aayog Amitabh Kant were present at this meeting. It gives significant strength to the Union Budget to be presented by Sitharaman in the Lok Sabha on 1st February 2021. There has given much focus on labour-intensive manufacturing given that the success in India has been achieved by launching the Production-Linked Incentives (PLI) scheme in mobile manufacturing. Also, to boost domestic manufacturing, the Government must focus on promotions, was said by another source from the meeting.
India’s GDP has been highly affected due to this pandemic that has severely hit the key manufacturing and services segments according to the National Statistical Office (NSO) on last Thursday. As per RBI, our nation’s economy is projected to reduce by 7.5% in the present fiscal ending March 31, 2021, while the IMF and World Bank will get curbed down to 10.3% and 9.6% respectively.