Column : NIB needs to include the states
Rising and high domestic savings as well as investment rates have been the hallmarks of the Indian growth story. Four years ago, in 2007-08, before the global economic slowdown began, the investment-GDP ratio had risen to 38.1% and GDP growth rate had exceeded 9%. In 2010-11 and 2011-12, it declined to 34.7%, and economic growth slowed to 8.4% and 6.5%, respectively. Between 2004-05 and 2010-11, the average gross domestic capital formation (GDCF) increase was 14.1% per annum while GDP growth averaged 8.4%. Ever since the April-June quarter 2011, it has steadily fallen, and in the first half of current fiscal, it was an abysmal 2.3%, with growth falling to a three-and-a-half year low of 5.3%.
Kick-starting economic revival through stepping-up investment is a pre-requisite and fast tracking the approval system is certainly called for. The proposed new structure reflects the realisation within the government for initiating such action. All central projects with an investment exceeding R1,000 crore are sought to be cleared by a three-member NIB chaired by the Prime Minister (or the Cabinet Committee on Investment
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