In order to give a boost to the economy, Prime Minister Narendra Modi held a detailed meeting Thursday on strategies to attract more foreign investment and promote domestic investment. He also reviewed the contribution of the mining sector in increasing employment opportunities and boosting growth.
Modi advocated a “more proactive approach” to handhold investors, solving their problems and helping them in getting all necessary central and state government clearances in a time-bound manner, according to a statement from the Prime Minister’s Office.
The meeting was attended by Home Minister Amit Shah, Finance Minister Nirmala Sitharaman, Minister for Commerce & Industries Piyush Goyal, MoS (Finance) Anurag Thakur and top officials of the central government. It came amid expectations that the government plans to announce a fresh set of relief measures for MSMEs and needy sections of society to help them combat the adverse economic effects of the lockdown.
“It was discussed that a scheme should be developed to promote more plug and play infrastructure in the existing industrial lands/plots/estates in the country and provide necessary financing support,” the PMO said. The government may look at easing some of the existing regulations to attract greater foreign investment.
“Various strategies to bring investments into India in a fast-track mode and to promote Indian domestic sectors were discussed. Detailed discussions were held on guiding states to evolve their strategies & be more proactive in attracting investments,” it said.
The shutdown of the economy to combat COVID-19 is expected to take a severe toll on economic activity, leading to a slump in economic growth and making any possible recovery very slow.
Economists and analysts argue that the economy, especially the MSMEs, would require greater fiscal support to survive through this worst downturn, even though the government will have to balance any expansion in public expenditure with the needs of maintaining fiscal balance.
Rating agency CRISIL has lowered its growth outlook for India in fiscal 2021 to 1.8 per cent, from the 3.5 per cent estimated earlier. The forecast is based on an assumption that the Covid effect will subside materially in the current quarter, besides a normal monsoon, and minimum fiscal support of Rs 3.5 lakh crore.
Data released Thursday showed that the output of eight core infrastructure industries shrank by 6.5 per cent in March due to fall in production of crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity amid the lockdown, compared to 5.8 per cent expansion in March 2019.
The first economic relief package of Rs 1.7 lakh crore was mainly focussed on direct cash transfers to the poor and income support to farmers. The next leg of relief is being aimed at providing help to companies along with a focus to free up lending resources of the banks.
“It was also discussed that the reform initiatives undertaken by the various Ministries should continue unabated and action should be taken in a time-bound manner to remove any obstacles which impede promotion of investment and industrial growth,” the PMO said.
Modi discussed potential reforms in the mines and coal sectors to give a boost to the economy — ensuring easy and abundant availability of mineral resources from domestic sources, upscaling exploration, attracting investment and modern technology, to generate large scale employment through a transparent and efficient processes.
According to an official statement, auctioning of additional blocks, encouraging wider participation in auctions, increasing the production of mineral resources, reducing the cost of mining and cost of transporting, increasing ease of doing business while also reducing carbon footprint with environmentally sustainable development also formed important part of the discussions.
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