The Prime Minister’s Office has asked the finance ministry to hold discussions with key ministries and come up with a comprehensive presentation on ways to create massive jobs and stimulate economic growth.
Acknowledging the low growth of private investment is a “problem”, finance minister Arun Jaitley on Thursday said the government was assessing the economic situation and “appropriate action” would be announced soon to address the slowdown in growth that hit a three-year low in the first quarter of this fiscal. Jaitley didn’t specify the quantum of stimulus measures to spur growth but Reuters reported the government was considering “a plan to loosen the fiscal deficit target (3.2% of GDP) so that it could spend an additional Rs 50,000 crore ($7.7 billion) in the financial year ending in March 2018”. “From day one, this is a proactive government. We are analysing the economic indicators and appropriate action will be taken at right time. There is a problem of private investment. The government has seized the issue. Very soon you will hear from us,” the finance ministry tweeted Jaitley as saying at the India Investor Summit organised by JP Morgan. On Wednesday, Jaitley had said more measures required to prop up the economy will be announced after consulting Prime Minister Narendra Modi.
The Prime Minister’s Office has asked the finance ministry to hold discussions with key ministries and come up with a comprehensive presentation on ways to create massive jobs and stimulate economic growth. Already, earlier this week, Jaitley held a series of meetings with some of his ministerial colleagues, including commerce and industry minister Suresh Prabhu and railway minister Piyush Goyal, and senior government officials for this purpose. Jaitley said banks have done excessive lending in the past and the proposal of capital adequacy of the banks is also on the table. On divestment, Jaitley said that the government had an ambitious target (Rs 72,500 crore) for the current fiscal, against Rs 46,247 crore in the previous fiscal. “Even today, we have Air India divestment meeting. In the last few years, the market was quite volatile at times, so the government had to wait for the right time for divestment. As far as divestment is concerned, we never had any reservations about privatisation,” he said.
Speaking on the issue of technical glitches following the launch of the goods and services tax (GST), the finance minister asked businesses to file their returns four to five days in advance to avoid last-minute problems. As far as universal basic income is concerned, as mooted in the Economic Survey for 2016-17, the finance minister is “personally in favour of it”. “Only fear is level of political maturity,” the finance ministry tweeted. Separately, to stimulate the economy by attracting private players in the affordable housing sector to meet the ‘housing for all’ target by 2022, urban affair minister Hardeep Singh Puri on Thursday unfolded a new public-private partnership (PPP) policy that allows extending central assistance up to Rs 2.5 lakh per house built by private builders, even on private land.