Slowdown fears: PM Modi to hold crucial meeting over weekend

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Published: November 28, 2019 2:24:39 AM

Finance secretary Rajiv Kumar is expected to give a presentation on behalf of the sectoral group on finance and corporate affairs.

economic slowdown, economic growth, Narendra Modi, Amit Shah, Piyush Goyal, Rajiv Kumar, Moodys, Nirmala SitharamanThe Modi government had first set up the sectoral groups in 2016 on key areas.

Amid fears that economic growth may be slipping into an extended period of slowdown, Prime Minister Narendra Modi is learnt to have convened a critical two-day meeting, starting Saturday, to review road maps for the economy and beyond, prepared by 10 “sectoral groups” comprising secretaries of several departments. Key ministers — including home minister Amit Shah, finance and corporate affairs minister Nirmala Sitharaman and commerce and industry minister Piyush Goyal — are expected to attend the meeting as well, a senior government official told FE.
The review will focus on ways to boost growth as well as private investments and help India turn into a $5-trillion economy by 2024, as envisioned by the Prime Minister, said another source.

Finance secretary Rajiv Kumar is expected to give a presentation on behalf of the sectoral group on finance and
corporate affairs.

“The groups are expected to submit ideas for further deliberations. Some of these ideas may find reflection in the Upcoming Budget,” one of the sources said. A brief review of a 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-compartible scheme to boost exports, and a Rs 25,000-crore fund (including contributions by LIC and SBI) committed for housing –- is also expected. Steps required to ensure “ease of living” is also likely to feature in the discussions.

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. The composition of the groups has changed over time, as some of the top bureaucrats have since retired.

The meeting comes at a time when economic growth already hit a six-year low of 5% in the June quarter and economists feel the rate of expansion may have dropped even further in the July-September period for the first time since the last quarter of FY13.

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 four of the first seven months of this fiscal, and banks’ non-food credit growth was hovering around a two-year low of 8.79% in the fortnight through October 25.

 

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