Prime Minister Narendra Modi on Saturday announced the creation of a high-powered committee on structural reforms in agriculture, saying this panel “would include some Chief Ministers… and take a holistic approach on the subject”. He also highlighted the Centre’s commitment to double the income of farmers by 2022.
Speaking at the fifth meeting of the Governing Council of the NITI Aayog, the Prime Minister also said the goal to make India a $5-trillion economy by 2024 was “challenging, but possible”, as he asked state governments to raise economic growth targets right from the district level. That, he said, would result in the Indian economy roughly doubling its present size — estimated at $2.75 trillion at end-March 2019 — in about five years.
Challenges on economic front
The fifth meeting of the Governing Council of the NITI Aayog comes in the backdrop of two important events. This is the first meeting of the council since the Modi government returned with a larger mandate. There are challenges on the economic front: the economy grew at 5.8 per cent in the January-March quarter, its slowest in five years. Besides, 2017-18 saw unemployment rates rising to a 45-year high of 6.1 per cent.
Barring the Chief Ministers of West Bengal, Telangana and Punjab, all other Chief Ministers, Union ministers and top bureaucrats attended Saturday’s meeting, which focused on increasing investment in the agriculture sector, boosting exports, and addressing issues of water supply and conservation. While West Bengal CM Mamata Banerjee had earlier refused to attend the meeting, calling it a “fruitless” exercise as the Aayog had no financial powers, Punjab Chief Minister Amarinder Singh could not attend the meeting due to health reasons.
Modi, chairman of the NITI Aayog, the government’s policy think-tank, stressed the need to increase exports in order to drive economic growth, arguing that there is immense untapped export potential in several states, including those in the Northeast. A thrust on export promotion at the state level will provide a boost to both income and employment, he said, according to a statement issued by the government.
Merchandise exports grew 11 per cent in March, against 2.4 per cent the preceding month, driving up outbound shipment in the last fiscal to a record $331 billion. However, goods trade deficit in 2018-19 rose to $176.4 billion.
Briefing reporters after the Council meeting, NITI Aayog Vice Chairman Rajiv Kumar said the global situation presents a unique opportunity for India to boost exports. “You will see that there is going to be significant movement on ramping up exports,” he said, when asked if the government would plan measures to counter threat of trade wars and protectionism.
The Council’s meeting comes in the backdrop of the Indian economy growing at a much-lower-than-expected rate of 5.8 per cent in the January-March quarter, its lowest in five years, while unemployment rate rose to a 45-year high of 6.1 per cent in 2017-18.
During the meeting, Modi spoke of the need to boost corporate investment, strengthen logistics, and provide ample market support. He said the food processing sector should grow at a faster pace than foodgrain production. Arguing that the Essential Commodities Act, 1955, was framed during the era of food scarcity, the NITI Aayog has proposed that the Act be scrapped because it is an “impediment in the free movement of commodities” given that the country is now mostly self-sufficient. This was part of the discussions at the meeting.
During his briefing, Kumar said many of the suggestions made by states would feature in the upcoming Budget. Kumar also said that the proposed high-level task force on agriculture, which the Prime Minister announced, would submit its report in the next few months.
Kumar said that to address the drought-like situation in many states, the Council has decided to set up a North East Water Management Committee which will finalise its report soon. Some states also pointed out the need to review the National Disaster Relief Fund norms and changes in the Forest Act. Finance Minister Nirmala Sitharaman pointed out in the meeting that devolution of resources from the Centre to the states have nearly doubled to Rs 41 lakh crore in the past four years, Kumar said.
With states such as Madhya Pradesh and Goa highlighting that mining activity in their states had declined in recent years, the meeting said that by July, a panel would recommend ways to boost output.
The meeting also discussed national security with specific focus on Left Wing Extremism-affected districts, with Modi saying the battle against Maoist violence is now at a decisive phase.
The Prime Minister said the newly created Jal Shakti Ministry would help provide an integrated approach to water, with the aim of providing piped water to every rural home by 2024 and raising the water table. Rules and regulations, such as model building bye-laws, also need to be framed for water conservation and management, he told the gathering.
The health sector, he said, had to keep in mind several targets that have to be achieved by 2022, including the aim of eliminating tuberculosis by 2025. The Prime Minister urged states that had so far not implemented the Pradhan Mantri Jan Arogya Yojana under Ayushman Bharat to come on board at the earliest.