More Reforms in Offing to Bring Back High Growth Trajectory as Efficiency Issues Linger, Says NITI Aayog
The government announced a series of economic boosters including capitalisation of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate.
File photo of NITI Aayog CEO Amitabh Kant.
New Delhi: The government will keep the reform momentum going with more such announcements in the future to bring back the economy on a higher growth track, though issues related with productivity efficiency persist, NITI Aayog CEO Amitabh Kant said on Thursday.
Going back to 2005 and till now, close to about 300 million people have been pulled out of poverty. In the last five years, the economy has grown at about 7.5 per cent.
India's growth was at about 8.1 per cent in the last quarter of 2017-18 and fell to 5 per cent in the June quarter of 2019-20, Kant said at the World Economic Forum's India Economic Summit-CII event here.
"And since then both the RBI and the government have taken a series of measures to take India back to a high growth trajectory. The RBI has dropped the repo rate by about 110 basis points to 5.4 per cent. But there is limitation to monetary policy and therefore the government stepped in and took a series of measures," Kant said.
The government announced a series of economic boosters including capitalisation of public sector banks, merging some of them, package for exports, and bringing down corporate tax rate, he said.
"I think many more structural reforms are in the offing. The government has pushed for public sector disinvestment. I can tell you we have pushed for asset monetisation in a very big way. Our belief is that instead of green-field projects, investors must come into brown-field projects," he said further.
The step to bring down the corporate tax rate was to align it with global standards, he said, adding the government must be a facilitator, a catalyst and should keep itself out of business.
"Our belief is that instead of green-field projects, investors must come into brown-field project... And government will put many of these assets out in the marketplace for many of you people to invest," he said.
He noted that agriculture, mining, coal are among the sectors where the government is pushing for mega reforms and people will see many of these reforms unfolding in the coming months.
"The key really is to work not merely on monetary policy but also bring in rapid structural reforms in economy so that we create the pace for long-term growth...and take India to a rate of growth of 9-10 per cent per annum for a three-decade period which will enable us to lift a vast segment of our people above the poverty line," he said.
Reacting to panel members' concerns on productivity rates he said, "Our productivity rates have to go up and this requires major-major structural reforms. One of the key things that the government has really pushed for is making India easy and simple,".
Among others, Kant also highlighted that India has gone digital in a big way, and the indirect tax has become all cashless and paperless.
"We have jumped up about 65 positions in the World Bank's ease of doing business ranking and our target is to reach the top 50 in the next two years and top 20 in the next five years and push this relentlessly," Kant added.
What the government is pushing for is no longer a political hot potato, he said.
"We are pushing for public sector disinvestment in a very radical way. NITI Aayog has recommended over 55 public sector companies for disinvestment and I can tell you that the government itself has approved over 26 of them for disinvestment...you will have soon a very very vast number of public sector companies getting privatised," Kant said further.
Admitting that the government is good at some things, but also very poor at operations and maintenance, he said this is the reason it is pushing that roads, transmission lines, airports, and a number of other tasks be managed and operated by private sector enterprises.
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