1. NITI Aayog’s 3-year agenda suggests key reforms to bolster economy

NITI Aayog’s 3-year agenda suggests key reforms to bolster economy

Niti Aayog in its three-year draft action agenda today suggested a host of reforms in taxation, agriculture and energy sectors with the objective of accelerating growth and increasing employment opportunities.

By: | New Delhi | Updated: April 26, 2017 3:00 PM
The draft agenda, released by Niti Aayog Vice Chairman Arvind Panagariya today, also underlined the need for recalibrating the role of the government by limiting its involvement in activities that do not serve a public purpose. (Source: IE)

Niti Aayog in its three-year draft action agenda today suggested a host of reforms in taxation, agriculture and energy sectors with the objective of accelerating growth and increasing employment opportunities. The draft agenda, released by Niti Aayog Vice Chairman Arvind Panagariya today, also underlined the need for recalibrating the role of the government by limiting its involvement in activities that do not serve a public purpose.

Among other things, the Aayog has also suggested the closure of loss-making CPSEs and strategic disinvestment in 20 state-owned companies. The three-year agenda (2017-18 to 2019-20) called for steps to check tax evasion, expand tax base and simplify taxation system through reforms. It suggested the government could consider consolidating existing custom duty rates to a unified rate.

The other suggestions include creation of an institutional mechanism to promote competition through comprehensive review and reform of government regulations across all sectors, besides strengthening of the public procurement system.

Stressing the need to bring down land prices to make housing affordable through increased supply of urban land, it suggested the need of reform in the Rent Control Act along the lines of the Model Tenancy Act. Other suggestions include, more flexible conversion rules from one use to another, release of land held by sick units, release of other urban land potentially available and more generous floor space index.

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It also recommended setting up of dormitory housing for migrants. The draft action agenda on the agriculture sector, which seeks to double the income of farmers by 2022, include reform of the Agriculture Produce Marketing to ensure that farmers receive remunerative prices. The Aayog’s three-year agenda also suggested raising productivity through enhanced irrigation, faster seed replacement and precision agriculture.

The farmers, it said, should be encouraged to shift to high-value commodities like horticulture, animal husbandry and fisheries. With regard to the energy sector, the draft agenda pitched for adopting consumer friendly measures such as provision of electricity to all households by 2022, LPG connection to all BPL households, elimination of black carbon by 2022 and extension of the city gas distribution programme to 100 smart cities.

It also suggested to reduce the cross-subsidy in the power sector to ensure competitive supply of electricity to the industry. The draft agenda also talked about reforming the coal sector by setting up a regulator, encouraging commercial mining and improving labour productivity.

With regard to transport and digital connectivity, the draft action agenda suggested strengthening infrastructure in roadways, railways, shipping and ports, inland waterways and civil aviation. It also pitched for ensuring last-mile digital connectivity, particularly for e-governance and financial inclusion, through developing infrastructure, simplifying the payments structure and improving literacy.

Facilitate public-private partnerships, it said, by reorienting the role of the India Infrastructure Finance Company Ltd (IIFCL) and added there is a need to “introduce low cost debt instruments and operationalise the National Investment Infrastructure Fund (NIIF)”.

Referring to job creation, the draft agenda sought creation of coastal employment zones to boost exports and generating high-productivity jobs.

It also emphasised on enhancing labour-market flexibility through reforms of key laws and addressing the high and rising share of non-performing assets (NPAs) in India’s bank through supporting action of larger assets to private reconstruction companies (ARCs) and strengthening the State Bank of India-led by ARC.

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On Science and Technology, it suggested creating a ‘National Science, Technology & Innovation Foundation’ to identify and deliberate national issues, recommend priority interventions in S&T and prepare frameworks for their implementation. It also suggested developing guidelines for PPPs in S&T to improve education and industry-academia linkages for demand-driven research. The draft agenda also stressed for streamlining the administration of the patent regime.

The agenda also pitched for enhanced focus on public health through significantly increasing government expenditure on it and suggested establishing a focal point and setting up a dedicated cadre. There is a need to generate and disseminate periodic, district-level data as per uniform protocols, the draft agenda said.

It also suggested launching the National Nutrition Mission and developing a comprehensive Nutrition Information System. The draft agenda also suggested to revisit the policy towards felling of trees on private land and transport of trees.

 

NOTE: Clarification on news reports regarding NITI Aayog’s Draft Three Year Action Agenda, published on 26thApril, 2017
Several newspaper reports published on April 26th, 2017, state that NITI Aayog or its Draft Three year Action Agenda has recommended that Farm Income in India be taxed to expand the existing Income Tax base. The NITI Aayog categorically states that this is neither the view of the Aayog nor is such a recommendation made anywhere in the Draft Action Agenda document as circulated to the Governing Council at the meeting on 23rd April 2017.

NITI Aayog notes that the views on Taxing Farm Income expressed by Member Shri Bibek Debroy were personal and not those of the Aayog.

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