Parliamentary Panel Calls For 35% GDP Investment Rate To Achieve 8% Growth Target
“The investment rate must increase to about 35 percent of the GDP from the current 31 per cent to achieve the ambitious growth target of 8 per cent annually for at least a decade": Parliamentary Panel
NEW DELHI: Prioritising rural, urban infrastructure and investing in people, a parliamentary panel on Tuesday called for raising the investment rate of gross domestic product (GDP) to 35 per cent to achieve the ambitious growth target of 8 per cent in the country. It also urged the government to maintain sustainable, growth-oriented energy policies that prioritise affordability and efficiency while balancing climate commitments with economic and social objectives.
“The investment rate must increase to about 35 percent of the GDP from the current 31 per cent to achieve the ambitious growth target of 8 per cent annually for at least a decade," the panel noted in a report.
The standing committee on finance, headed by BJP leader Bhartruhari Mahtab also suggested that the ministry/central electricity authority should expedite the development of pumped storage projects, recognising their critical role in strengthening energy security and reducing import dependency.
The committee also highlighted the collaborative approach through the deregulation task force chaired by the cabinet secretary. “Financing this may result in higher levels of current account deficit, which is challenging under current global circumstances. This emphasises the need for domestic-led growth, for which deregulation is crucial," it said in a report.
The panel also said that this model of cooperative federalism -- facilitating dialogue with states on best practices in land, labour, capital, and regulatory reforms -- can streamline business processes and foster an investor-friendly environment. “Tailored fiscal reforms may be promoted in highly indebted states to improve their fiscal health while maintaining their capacity to invest in critical infrastructure and social development,” it said.
With regard to the farm sector, the panel also said that the vast untapped potential of India’s agriculture sector as a pivotal driver for inclusive economic growth. “To unlock this potential, the committee emphasises a dual approach, addressing immediate challenges while implementing long-term structural reforms. For short-term stability, it observed that the government's strategy such as maintaining buffer stocks; regulating market supplies; and subsidising key food items helps to stabilise food prices and ensure affordable access to essential commodities,” the report said.
To further enhance agricultural productivity and foster financial inclusion, the committee also recommended acceleration of digital initiatives. “This includes digitising land records and implementing the agri-stack, a technological framework designed to link farmers' produce with banking and credit systems. This would facilitate transparent and timely disbursement of crop loans,” it said.
The committee also believed that promoting diversified crop production, strengthening supply chain infrastructure, and encouraging private sector participation in agri-tech innovation are vital steps. “These coordinated efforts can effectively mitigate supply-side inflation, sustainably boost farmers’ incomes, and transform agriculture into a powerful engine for India's growth,” it added.
