PM Narendra Modi to discuss economic situation with finance minister Arun Jaitley today

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New Delhi | Published: September 19, 2017 6:04:47 AM

Modi will likely get briefed on measures to create massive jobs and boost economic growth, which plunged to a three-year low of 5.7% in Q1FY18.

Prime Minister Narendra Modi will meet finance minister Arun Jaitley and other top officials on Tuesday to review the state of the economy, a senior government official said on Monday. (PTI)

Prime Minister Narendra Modi will meet finance minister Arun Jaitley and other top officials on Tuesday to review the state of the economy, a senior government official said on Monday. Modi will likely get briefed on measures to create massive jobs and boost economic growth, which plunged to a three-year low of 5.7% in Q1FY18. Steps to spur private investments could also feature in discussion. Top officials of various departments of the finance ministry will attend the meeting as well. Even last week, chief economic advisor Arvind Subramanian briefed Modi on various economic issues, including the recent pick-up in domestic fuel prices. The meeting comes at a crucial time: GDP growth slowed for a sixth straight quarter through Q1FY18, shedding some 2.2 percentage points since Q1FY17; retail inflation rose close to 2 percentage points in just two months through August; growth in gross fixed capital formation touched just 1.6% in Q1FY18, while private final consumption expenditure slowed 60 basis points in Q1 from the previous quarter.

The teething troubles following the GST rollout and the after-effects of the note ban continue to weigh on the economy. Domestic petrol and diesel prices are hovering around a three-year high, leading to consumer dissatisfaction. Banks are saddled with massive bad debts and credit growth remains muted. CAD has started inching up again — 2.4% of GDP in Q1, against 0.6% in the previous quarter. Exports-to-GDP ratio, in real term, fell to 19.4% in Q1 from 21% in the previous quarter. Imports are rising at a faster pace than exports, leading to a jump in trade deficit.

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