The two-day meeting is expected to focus on ways to boost growth as well as private investment and help India turn into a $5-trillion economy by 2024, as envisioned by the Prime Minister.
Prime Minister Narendra Modi on Friday reviewed the state of the economy and other crucial issues with the council of ministers and key secretaries, with a focus on vision documents of various ministries for the next five years, an official source told FE. The meeting will continue on Saturday as well.
The interaction follows a series of meetings that the Prime Minister held with various stakeholders, including captains of industry, electronics players and textile and garment companies, in recent weeks to seek their inputs on the economic slowdown and what can possibly be done to catapult India on to a high growth trajectory. He is learnt to have sought specific inputs on what policies are working and what are not. The economic expansion plunged to an over six-year low of 4.5% in the September quarter, with analysts predicting a prolonged phase of slowdown.
Sources had earlier told FE that as many as 10 “sectoral groups” comprising secretaries of several departments were to give presentations before the Prime Minister and other ministers over two days through Saturday. Key ministers, including home minister Amit Shah, finance and corporate affairs minister Nirmala Sitharaman and commerce minister Piyush Goyal, are understood to have attended the meeting, among others.
Some of the ideas presented in these vision documents may find mention in the next Budget. The two-day meeting is expected to focus on ways to boost growth as well as private investment and help India turn into a $5-trillion economy by 2024, as envisioned by the Prime Minister.
The raft of measures taken by the government recently to perk up growth — including the corporate tax rate cut, push for credit offtake, recapitalisation of state-run banks, a WTO-compatible scheme to boost exports, and a Rs 25,000-crore fund (including contributions by LIC and SBI) committed for housing – is believed to have been reviewed. Steps required to ensure “ease of living” are understood to have also featured in the discussions.
The economy is going through a critical phase. Already, citing growth concerns, Moody’s recently trimmed India’s sovereign rating outlook to “negative” from “stable”. Industrial production shrank in September to an eight-year low, while eight core infrastructure industries witnessed their worst contraction at least since April 2005 in September. Exports declined in five of the first eight months of this fiscal, and banks’ non-food credit growth has been hovering around a two-year low.
The Modi government had first set up the sectoral groups in 2016 on key areas, including finance and corporate affairs, commerce and industry, agriculture and allied sectors, transport and communications, energy and environment, health, sanitation and urban development, education and social development, governance and crisis management.