NITI Aayog chief refers to Rao and Vajpayee govts, says reforms will lead to accelerated growth with a lag
India’s economy will likely expand by 7.5% this financial year and by more than 8% by 2018-19 as economic reforms being put in place by the National Democratic Alliance (NDA) government start delivering results, NITI Aayog vice-chairman Arvind Panagariya said on Friday.
“The full impact of the economic reforms and changes in governance being undertaken at present is yet to be realized,” said Panagariya , who was a professor of economics at Columbia University before taking charge in 2015 at NITI Aayog, the government think tank that replaced the Planning Commission.
“Reforms will lead to accelerated growth with a lag,” he said, citing the experience with reforms carried out in the 1991-96 term of the Congress government under P.V. Narasimha Rao and subsequently by the NDA regime led by Atal Bihari Vajpayee in 1998-2004.
The impact of the reforms and economic growth in job creation, especially in rural areas, which is not being adequately captured, will be reflected in the new national household survey of employment the National Sample Survey Office launched in April, Panagariya said at a media briefing in New Delhi.
The survey, which will give job creation data at the national level annually and urban employment generation every quarter, is set to be a key tool for policymaking.
Panagariya, who is heading a task force on evolving a methodology to generate timely and reliable employment data, said a report will be finalized within a matter of weeks.
The Labour Bureau, which releases jobs data, tracks only eight sectors, including textiles, leather, metals, automobiles and gem and jewellery. Panagariya said the potential of labour-intensive sectors like textiles to generate jobs is immense.
The government has paved the way for rolling out a goods and services tax (GST), described as the biggest tax reform in postIndependence India, which will dismantle inter-state barriers to trade and likely boost economic growth. A new bankruptcy code will help ensure speedy resolution of financial distress at companies.
“The process of reforms will continue, which is going to pay off. Eight percent growth is completely achievable by the time the current government completes its term,” Panagariya said.
In fiscal 2016-17, the economy grew 7.1% although fiscal fourth-quarter growth slowed to 6.1% in the aftermath of demonetization of high-value currency notes in November. Panagariya said the economy was “out of the woods” as re-monetization had been completed.
Abheek Barua, chief economist at HDFC Bank Ltd, agreed. The impact of demonetisation on the economy, had dissipated by March, he said. “Our outlook for GDP growth in the current financial year is in the range of 7.6-7.7%.”
The federal policy think tank is set to advise the Punjab government led by chief minister Amarinder Singh on evolving a development plan, the way it is working with the Uttar Pradesh government of Yogi Adityanath.
The think tank came out with a three-year policy action plan for state governments after the end of the 12th five-year plan in 2016-17. It favours the closure of sick staterun firms as well as strategic disinvestment in select loss-making public sector companies. The pace of strategic disinvestment in companies will pick up, Panagariya said.
Mint New Delhi, 03rd June 2017
India’s economy will likely expand by 7.5% this financial year and by more than 8% by 2018-19 as economic reforms being put in place by the National Democratic Alliance (NDA) government start delivering results, NITI Aayog vice-chairman Arvind Panagariya said on Friday.
“The full impact of the economic reforms and changes in governance being undertaken at present is yet to be realized,” said Panagariya , who was a professor of economics at Columbia University before taking charge in 2015 at NITI Aayog, the government think tank that replaced the Planning Commission.
“Reforms will lead to accelerated growth with a lag,” he said, citing the experience with reforms carried out in the 1991-96 term of the Congress government under P.V. Narasimha Rao and subsequently by the NDA regime led by Atal Bihari Vajpayee in 1998-2004.
The impact of the reforms and economic growth in job creation, especially in rural areas, which is not being adequately captured, will be reflected in the new national household survey of employment the National Sample Survey Office launched in April, Panagariya said at a media briefing in New Delhi.
The survey, which will give job creation data at the national level annually and urban employment generation every quarter, is set to be a key tool for policymaking.
Panagariya, who is heading a task force on evolving a methodology to generate timely and reliable employment data, said a report will be finalized within a matter of weeks.
The Labour Bureau, which releases jobs data, tracks only eight sectors, including textiles, leather, metals, automobiles and gem and jewellery. Panagariya said the potential of labour-intensive sectors like textiles to generate jobs is immense.
The government has paved the way for rolling out a goods and services tax (GST), described as the biggest tax reform in postIndependence India, which will dismantle inter-state barriers to trade and likely boost economic growth. A new bankruptcy code will help ensure speedy resolution of financial distress at companies.
“The process of reforms will continue, which is going to pay off. Eight percent growth is completely achievable by the time the current government completes its term,” Panagariya said.
In fiscal 2016-17, the economy grew 7.1% although fiscal fourth-quarter growth slowed to 6.1% in the aftermath of demonetization of high-value currency notes in November. Panagariya said the economy was “out of the woods” as re-monetization had been completed.
Abheek Barua, chief economist at HDFC Bank Ltd, agreed. The impact of demonetisation on the economy, had dissipated by March, he said. “Our outlook for GDP growth in the current financial year is in the range of 7.6-7.7%.”
The federal policy think tank is set to advise the Punjab government led by chief minister Amarinder Singh on evolving a development plan, the way it is working with the Uttar Pradesh government of Yogi Adityanath.
The think tank came out with a three-year policy action plan for state governments after the end of the 12th five-year plan in 2016-17. It favours the closure of sick staterun firms as well as strategic disinvestment in select loss-making public sector companies. The pace of strategic disinvestment in companies will pick up, Panagariya said.
Mint New Delhi, 03rd June 2017
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