In virtual meet, economists urge PM Modi to push privatisation, increase infra spending

On Friday, Prime Minister Narendra Modi highlighted the fiscal and reform measures undertaken by the government following the COVID-19 outbreak. A discussion was held with the top economists who pitched for pushing privatisation, avoiding challenging international arbitrations and increasing infrastructure spending. For 2021-22 due to the urgency to revive the pandemic-hit economy, the government could take a lenient view on fiscal deficit in the forthcoming Budget, some economists suggested during the virtual meeting with the Prime Minister.

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According to a note issued by Niti Aayog after the meeting, the participants were broadly in agreement that next year will see robust growth and suggested measures to maintain this growth rate to drive India's socio-economic transformation.

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PM Modi's Highlights

After a two-hour long meeting, the Prime Minister highlighted that together with a fiscal stimulus, the government also tried reform-based stimulus, which was seen in historic reforms in agriculture, commercial coal mining and labour laws. COVID-19 pandemic and the subsequent management brought up new professional challenges for all those involved.

According to the note, PM Modi explained his vision behind Atmanirbhar Bharat, where Indian companies are integrated into global supply chains in a manner not seen before.He also stated the importance of partnerships in achieving goals and how it helps in setting the broader economic agenda.

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Economists pitch to Ministry 

The participants urged the government to come up with policies:

• Increase exports and boost investors' confidence, despite multiple structural reforms across sectors as investments are still not flowing into India in a big way.
• Need to raise India's tax-to-GDP ratio, which is declining since 2008,
• Embark on import tariff rationalisation and undertake bank recapitalisation
• Need to create a separate ministry for the privatisation of PSUs and assets, if needed, as was the case earlier.

Finance Minister Nirmala Sitharaman, Minister of State (MoS) for Finance Anurag Thakur, MoS Planning Rao Inderjit Singh, Niti Aayog Vice Chairman Rajiv Kumar and Niti Aayog CEO Amitabh Kant too attended the virtual meeting.

The economy contracted by a massive 23.9 per cent in the first quarter and 7.5 per cent in the second quarter of this fiscal on account of the COVID-19 pandemic. India's economic growth stood at an estimated 4.2 per cent in 2019-20.

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(With PTI Inputs)