NEW DELHI: The government is worried about the economic slowdown and Finance Minister Arun Jaitley will meet top bureaucrats and commerce minister Suresh Prabhu at 6.30 this evening to discuss intervention to put the economy back on a high growth path. Key indicators such as the Gross Domestic Product (GDP) and industrial production continue to plummet and a widening current account deficit has added to the worries. Prime Minister Narendra Modi was scheduled to chair today’s review, but sources said he will hold a meeting later. The brainstorming session today could include discussions on a financial package to stimulate the economy, sources said.
Here is your 10-point cheat-sheet to this story:
1.The Finance Minister and officials will discuss steps to boost economic growth, create jobs and revive private investment.
2.The government is concerned at the stuttering growth despite a benign macroeconomic environment with easy money flowing in, global growth reviving, government revenues looking solid, deep foreign exchange reserves, reasonable oil prices and a decent monsoon keeping food prices in check.
3.Increasing government spending, particularly on infrastructure, combined with quickly fixing glitches in the Goods and Services Tax (GST) are likely to be discussed. Chief Economic Adviser Arvind Subramanian had briefed the Prime Minister on the macro-economic situation last week.
4.Arun Jaitley had yesterday met Railway Minister Piyush Goyal and Minister of State Commerce and Industry CR Chaudhary. Today’s meeting will include NITI Ayog Vice Chairman Rajiv Kumar and Secretaries in the Finance Ministry — Ashok Lavasa, Subhash Chandra Garg, Hasmukh Adhia, Rajiv Kumar and Neeraj Kumar Gupta.
5.The meeting comes days after government data showed GDP growth in the first quarter of the current fiscal slumping to a three-year low of 5.7 per cent, from 7.9 per cent in the same quarter last year and 6.1 per cent in the last January-March quarter. GDP growth has declined steadily for six straight quarters.
6.Exports face strong headwinds and industrial growth is the lowest in five years.
7.The current account deficit (CAD) in the April-June quarter has risen to 2.4 per cent of the GDP, or US dollars 14.3 billion, mainly on account of an increased trade gap. CAD is the difference between inflow and outflow of foreign exchange. It was 0.1 per cent (USD 0.4 billion) in the June quarter last year and 0.6 per cent (USD 3.4 billion) in the January-March quarter this year.
8.Economists have blamed teething troubles in the implementation of the Goods and Services Tax (GST) and a lingering impact of last year’s notes ban for the slowdown and these will be discussed at today’s meeting, sources said. They said direct and indirect tax collections so far and projections for the whole year will also to be presented to PM Modi.
9.Disinvestment proceeds may also be presented to give a fuller picture of government finances.
10.Inflationary pressures, along with reasons for the low manufacturing growth of 1.2 per cent in July and the spread of monsoon and its impact on agricultural economy are also expected to be discussed at the meeting. Both wholesale and retail inflation rose in August.