For ‘saleable’ India, work on infra, tax regime: economists tell Modi

Prime Minister Narendra Modi wants an economic policy that is ‘saleable’.

The Prime Minister on Friday met a diverse group of economists, bureaucrats, and tax experts just for this at the newly constituted NITI (National Institution for Transforming India) Aayog.

Those present at the interaction included Vijay Kelkar, Nitin Desai, Bimal Jalan, Rajiv Lall, R Vaidyanathan, Subir Gokarn, Parthasarathi Shome, Pulapre Balakrishnan, Rajiv Kumar, Ashok Gulati, Mukesh Butani and GN Bajpai. The discussion was around the state of the economy and the upcoming Budget.

Modi wanted all of them on the same page and to come up with ideas to speed up economic development so as to meet the rising aspirations of the people. According to those in the know, Modi was well aware that not everyone was likeminded on such economic issues as GDP, interest rates and Make in India.

For instance, on interest rates, while RBI Governor Raghuram Rajan had on December 12 said, “Financial stability sometimes means regulators, including the central bank, have to go against popular sentiment. The role of regulators is not to boost the Sensex but to ensure that the underlying fundamentals of the economy and its financial system are sound enough for sustainable growth…”

Almost as a come back, on December 29, Finance Minister Arun Jaitley said, “The cost of capital… I think is one singular factor which has contributed to slowdown of manufacturing growth itself… manufacturers find it difficult to afford costly capital…”

The economists wanted the Government to push for high growth, a predictable tax regime, fiscal prudence and rapid infrastructure development. According to another source, “The intent is to sort out the difference of opinion among the key functionaries of the Government.”

The official word is that the Prime Minister wanted India to develop fast, taking advantage of the current global environment. His emphasis was on cooperative federalism, and he wanted States to compete to excel, said a government statement.

Talking to reporters after the meeting, Jaitley said the state of economy and the steps needed to boost investment and growth as well as specific suggestions on the Budget (February 28) were discussed.

“The discussions were in relation to the financing of infrastructure, how to attract investment, how to boost domestic savings and the state of agricultural sector,” the Finance Minister said.

COMMENT NOW