Govt will bring bigger opportunity for transformation in next 5 years: PM

Modi interacts with economists and India Inc chiefs ahead of the Budget

The Narendra Modi government in its second term is looking to do much more than it did during its first tenure. The next five years will present a bigger opportunity for transformation than the government had in the last five, the PM is learnt to have said in a meeting with economists and chief executives of India Inc at the Niti Aayog on Saturday. 

This was part of a series of meetings that the PM lined up ahead of the Union Budget to be presented on July 5.

In line with the goal to be a $5-trillion economy in five years, the PM reiterated that the country needed to benchmark itself with the global best practices, an official who attended the meeting said. 

The institutional structure designed for a different era had become sort of a burden and that must change, according to the PM. Lateral entry in the government was among the ideas discussed to break from the past. 

The issues flagged by economists and experts included a case for “single-minded pursuit” to boost economic growth, sources said. The subject of discussion ranged from macro-economy and employment to agriculture and water resources; exports to education and health. There were suggestions from the industry on further liberalisation in the banking and insurance sectors as well as fast-tracking the disinvestment process. Creation of jobs, improving exports amid trade wars and initiating structural reforms figured in the interactive session.

Around 40 economists and corporate chiefs attended the meeting. N Chandrasekaran (chairman, Tata Sons), T V Narendran (global CEO and MD, Tata Steel), Anil Agarwal (chairman, Vedanta Resources), Sanjiv Puri (chairman and MD, ITC), and Vijay Shekhar Sharma (CEO, Paytm) were among the industry leaders present. 

Economists and experts present at the meeting included Bimal Jalan (former RBI governor), Shankar Acharya (former chief economic adviser), Surjit Bhalla (former PMEAC member), Vikram Limaye (CEO, NSE), Sonal Varma (chief economist, Nomura), Shekhar Shah (DG, NCAER), and Bibek Debroy (chairman, EAC-PM).

The industry believes that this government would like to work more closely with the private sector in its second term, he said.

During the meeting, the PM indicated that the government would be engaged with the public for their inputs on two landmark events — 75 years if Independence and 150th birth anniversary of Mahatma Gandhi.

On employment, discussions centered around formalisation to create jobs. “There is a divide between north and south India. North’s per capita income is lagging behind South, hence a suggestion to the government was to create more labour intensive industries in the north,” said a person who attended the meeting.

There were discussions on the liquidity crisis in non-banking financial companies (NBFCs) and how it was essential for them to regain health in order to boost lending and consumption. It was suggested that there should be an asset quality review of NBFCs like it was done for state-owned banks a few years earlier.

“Lending to the micro, small and medium enterprises also need to increase. We are a capital scarce country and hence there were suggestions on how to bring in more capital,” the person quoted above said.

The economists and corporate executives also spoke on the need to step up investment in education and health, and find ways to hire more doctors and teachers. On exports, the PM is learnt to have said that India should increase foodgrain exports to countries in the Arabian Gulf region, from where it imports oil. As for agriculture, there were suggestions on replicating the Chhattisgarh irrigation model nationwide. Participants also sought active government role to deal with water scarcity issues.

The PM admitted the government would not be able to include all the suggestions in the upcoming Budget, but assured the participants that the government would take the suggestions forward.