Prime Minister Narendra Modi on Friday called upon Corporate India to leverage synergies with the public sector and think out of the box to seize opportunities arising as a result of the emerging global environment.
While interacting with noted economists and experts at Niti Aayog ahead of the FY24 Budget, he also made a pitch for greater participation of women in the workforce.
The comments come at a time when there are early signs of a new investment cycle in India, but the global headwinds are seen slowing the country’s exports and the GDP growth in the next financial year. A shift in the global supply chain due to a slowdown in China holds both opportunities and short-term challenges for the country.
Modi noted that while there were risks, the emerging global environment offered new and diverse opportunities for the country in areas such as digitisation, energy, health care and agriculture. The prime minister cited India’s globally-acclaimed digital payments volume and rapid adoption of fintech, steps that are expected to allay fiscal worries and aid financial inclusion and channelisation of household savings into the financial sector.
India’s digital payment volume has risen at an average annual rate of about 50% over the past five years. In 2022, 74 billion UPI transactions amounting to Rs 125 trillion were made in India. UPI has achieved a record of 7.83 billion digital payment transactions with a value of Rs 12.82 trillion in December 2022.
Female participation in the workforce is one of the lowest in the world, and this has fallen further during the pandemic.
The prime minister underscored ‘Nari Shakti’ as a key driver of India’s growth and urged for efforts to further enable and boost women’s participation in the workforce.
Modi also highlighted the need to promote millets in view of their potential to transform the rural and agriculture sectors, with attributes like carbon-neutral, conducive to natural farming and affordable source of nutrition.
Participants in the meeting offered practical measures on ways in which India could prudently sustain its development momentum, according to an official statement. Ideas and suggestions were shared with the prime minister on diverse topics ranging from agriculture to manufacturing, it added.
Recognising that the underlying global headwinds are likely to continue, strategic recommendations were also shared for further strengthening India’s resilience. There was agreement that due to its resilience, India has emerged as a bright spot on the turbulent global stage. It was suggested that new growth impulses would need to build upon this foundation through holistic development across all sectors.
The deliberations were based on the theme “India’s Growth & Resilience Amidst Global Headwinds”.
As many as 19 economists, including Shamika Ravi, Ashok Gulati and Chetan Ghate, among others, attended the meeting.
“I firmly believe that what the IT sector did for the Indian economy in the last 40 years as an engine of growth, the healthcare sector can do this for us to the next 100 years,” Ravi said. Not only the OECD countries, but even middle-income countries have ageing population and are witnessing rising health costs. “They are looking for solutions to reduce health costs. The solutions are either in the form of health HR, health IT or looking to buy, whether it is products, devices, drugs, vaccines, etc, from countries like India,” Ravi said.
The government deserves credit for increasing the transparency of the Budget numbers and improving the quality of government spending even amidst the shock delivered by the pandemic to the Centre’s finances. At the same time, capital expenditure increases outpaced the growth of the overall Budget size in recent years. Revenue deficits have in recent years been declining as a fraction of the fiscal deficits. These trends are most likely to continue in FY24 too.
Also, the government seems to stick to the medium-term fiscal consolidation target of reducing the fiscal deficit to below 4.5% GDP by 2025-26, from the sharply elevated levels caused by the pandemic. Inflation management would also continue to be a priority area for the government to insulate people from the price rise.
(with PTI inputs)