Narendra Modi to meet experts today to reset economic policy

A file photo of Prime Minister Narendra Modi. Photo: Vipin Kumar/HT

A file photo of Prime Minister Narendra Modi. Photo: Vipin Kumar/HT

New Delhi: With economic growth estimated to pick up further momentum after the shake-up from structural reforms, the government is getting into broad-based consultation for a new economic policy for the future.

Prime Minister Narendra Modi along with senior cabinet colleagues will discuss on Wednesday “the road ahead” for social, economic and fiscal policy with experts and economists from all over the country. The idea is to get diverse views on the challenges confronting the government—rural distress, government’s fiscal position after the indirect tax reform, private investments and job creation.

The outcome of Wednesday’s discussions on key themes, including macroeconomic balances, agriculture and rural development, urban development, infrastructure and connectivity, employment, manufacturing, exports, health and education, could get echoed in the Union Budget for 2018-19, the last full budget of the National Democratic Alliance (NDA) regime before the 2019 elections. The new social and economic goals will form the pillars of Modi’s blueprint for a “New India”.

As per the schedule shared by federal policy think tank Niti Aayog, which is organising the meeting, finance minister Arun Jaitley, transportation minister Nitin Gadkari, agriculture minister Radha Mohan Singh, minister of state for planning Rao Inderjit Singh and vice-chairman of Niti Aayog Rajiv Kumar will also attend the meeting. Secretaries of various ministries will discuss themes with experts in detail and brief Modi in the evening.

According to the latest forecast from Central Statistics Office (CSO), the economy expanded at 6% in the six months ended 30 September and will complete FY18 with a 6.5% growth, implying a 7% expansion in the second half ending 31 March. Getting back to a 7%-plus growth rate will give the government the headroom for higher public spending.

According to an analysis of the economy that consulting firm EY issued in the last week of December, there are clear signs that growth numbers might progressively climb up from now on with the effects of demonetisation and transition hiccups of goods and services tax (GST) firmly behind us. “Within GDP growth numbers, a highly encouraging sign is that while export growth has remained positive, import growth has fallen, enabling a reduction in the negative contribution of ‘net exports’ to GDP growth in the September quarter of FY18,” said the EY note.

Nikkei India Manufacturing Purchasing Manager’s Index (PMI) showed improvement to 54.7 in December 2017 from 52.6 in November, suggesting expansion in production, according to a Nikkei India statement on 1 January.