Bold, structural reforms like demonetisation will provide a “bigger spurt” to the economy by plugging leakages through promoting further adoption of digital payment mechanisms, a top official said today.
Addressing the AGM of PHD Chamber of Commerce, NITI Aayog CEO Amitabh Kant said, “While we are growing at about 7.5-7.6 per cent, India must be very hungry and ambitious for growth of 9-10 per cent”.
He outlined the need for structural reforms like GST, Bankruptcy Law and demonetisation to achieve high rate of growth.
Highlighting the benefits of moving towards a cashless, digitised economy, Kant said it can eliminate corruption, counterfeiting and financing for terror activities.
“Once you move to a digitised economy you plug all these loopholes to ensure that there are no leakages. What will happen as a consequence is that your economy is able to move, banks will get flush with funds, interest rates will come down, tax rates will come down and over a period of time demonetisation will enable you to give a bigger spurt to your economy,” the NITI Aayog chief said.
Laying out a multi-pronged approach for India to achieve 9-10 per cent economic growth over a period of three decades, Kant said the country needs to have consistency and predictability in the policy regime, coupled with factor market reforms in land and labour, and bring about women’s emancipation.
“You need factor market reforms. Unless labour laws and land laws are reformed it will be very difficult for India to grow at high rates over a long period of time. You can’t be in a situation where 79 per cent of your job creation is done by the MSME sector,” Kant said.
The chief of government think-tank NITI Aayog pointed out that exports have to play a very critical role as the share of India’s exports in global markets is very minimal, at just 1.7 per cent.
“Unless we penetrate global markets it will be very difficult for India to grow at rates of 9 to 10 per cent,” he said, outlining the need for gender parity.
“India is a country where our women contribute only 17 per cent to our GDP. The world average is about 40 per cent. If we are able to bring in gender parity, we will be able to create close to 700 billion worth of wealth,” Kant said.
Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek sought public feedback to gauge the impact of reforms at the ground-level.
“We want public feedback about reforms that are being done, whether those have been working, whether it is taking less time or not. We can validate whether reforms that are being done have been working or not only if we get public feedback,” Abhishek said.
Speaking at another conference organised by traders’ body CAIT, Kant said, “the biggest economic revolution by demonetising will be successful only if digital payment system is adopted at mass level”.
Abhishek appealed to traders that they have to adopt technology, digital payment system and doing business through e-commerce.