New Delhi: With India’s GDP sinking to a three-year low, Prime Minister Narendra Modi will interact with finance minister Arun Jaitley and top finance ministry officials on Tuesday on measures to stimulate the economy.
Government circles have begun acknowledging that there is a need to step in as growth falters. From last week there have been a series of meetings to explore ways to give the economy a boost. Meetings were held between finance ministry and PMO officials on forming a strategy to revive “animal spirits” in the economy. There are indications that chief economic adviser Arvind Subramanian had last week given a presentation on the situation to the Prime Minister.
Sources said various measures are being looked at. But there are also fiscal constraints before the government and any measures announced will have to factor these in.
Tuesday’s meeting with the PM is likely to focus on what ails the economy and the fiscal space available to the government. Steps to boost economic growth, create jobs and revive private investment may be a part of the discussion.
India’s GDP growth in April-June (first quarter of 2017-18) slowed sharply to a three-year low of 5.7 per cent. GDP growth has decelerated in every quarter for over a year.
It fell from 7.9 per cent in April-June 2016-17 to 7.5 per cent in July-September 2016-17, then to seven per cent in October-December 2016-17 and further to 6.1 per cent in January-March 2017.
Exports are also facing strong headwinds and industrial growth is at its lowest in five years. The government is concerned over faltering growth despite a benign macro-economic climate with easy money flowing in, global growth reviving, solid government revenues, deep foreign exchange reserves, reasonable oil prices and a decent monsoon keeping food prices in check.
