With just over a month remaining for the NDA-II government’s third Budget, Prime Minister Narendra Modi is scheduled to meet senior economists and analysts from India and abroad, besides senior government officials, this Tuesday. It will be the first such meeting by Modi this year, and comes at a time when the implementation of the demonetisation scheme announced by him on November 8 has come into question.
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“The meeting is coordinated by NITI Aayog. The National Institution for Transforming India (NITI or NITI Aayog) is likely to present to the Prime Minister the ideas that will go into making its 15-year vision document. Besides, the PM is also likely to seek views from economists on the Budget for 2017-18,” a government source said.
On July 28, Modi had asked NITI Aayog to create a vision document for India’s development for the next 15 years, saying that the time for incremental change was over and that the current age required transformational change.
Sources said that among those invited for the meeting are Vivek Dahejia, economics professor, Carleton University in Ottawa, Canada; NIPFP (National Institute of Public Finance and Policy) Director Rathin Roy; Credit Suisse Managing Director Neelkant Mishra; and Chairman, Oxus Investments, Surjit Bhalla, who is also a columnist with The Indian Express. NITI Aayog members Bibek Debroy, V K Saraswat and Ramesh Chand, besides secretary-level officers from the Commerce and Finance ministries, are also likely to attend.
While demonetisation and cash crunch are not mentioned in the agenda, sources said they are likely to figure in the discussions. “The Budget will be presented in the backdrop of the demonetisation scheme. So there are bound to be discussions on what should be the Budget focus to put the economy on a higher growth trajectory. There have been estimates that the economy will suffer a setback in the current quarter and the subsequent couple of quarters also,” said a source.
Sources added that the NITI Aayog believes codification of tax rules and lower tax rates may be considered in the Budget for next year.
Once the PM’s deadline for demonetisation ends on December 30, the Tax Department will be looking at millions of bank transactions for unusual or high-value deposits in this time period. This may require some planning to avoid harassment to genuine bank account holders, sources said.