New Delhi: As the economic growth sank to a three-year low, Prime minister Narendra Modi on Tuesday will interact with finance minister Arun Jaitley and other top finance ministry officials to explore the measures, which need to be taken to boost the economic growth.
There is an acknowledgement within the government that there is a need to step in as the economic growth has begun to falter.
From last week, there have been a series of meeting within the government to explore ways to give a boost to the economy. There has been meeting between the the finance ministry and PMO about devising a strategy to revive the animal spirits in the economy.
Some reports suggested that chief economic adviser (CEA) Arvind Subramanian had last week given a presentation on economic situation to the Prime Minister. According to sources, various measures are being looked at.
However, there are also fiscal constraints for the Central government, which limits its ability to bankroll the economic activity. So the proposed measure would have to factor in those constrains also. The meeting with the Prime Minister on Tuesday is likely to focus on what ails the economy and the fiscal space available with the government.
Steps to boost economic growth, create jobs and reviving private investment may be part of the discussion.
India’s GDP growth during April-June period (first quarter of 2017-18) slowed sharply to a three-year low of 5.7 per cent.
India's GDP growth has decelerated in every quarter since over a year. It fell from 7.9 percent in April-June 2016-17 to 7.5 percent in July-September 2016-17 to 7 percent in October-December 2016-17 and further to 6.1 percent in January-March 2017. This shows the challenge before the Modi government to restart the growth momentum in the country. The manufacturing sector grew by mere 0.1 per cent in July.
Exports are also facing strong headwinds and the industrial growth is the lowest in five years.
The government is concerned at the stuttering growth despite a benign macroeconomic environment with easy money flowing in, global growth reviving, government revenues looking solid, deep foreign exchange reserves, reasonable oil prices and a decent monsoon keeping food prices in check.
