Acknowledging that a slowing economy and need for jobs are pressing issues that need sustained follow-up, the new government under Prime Minister Narendra Modi Wednesday decided to set up two new committees of the Cabinet — one on Investment and Growth, and the other on Employment and Skill Development.
While an official notification is awaited (it was released Thursday morning) multiple sources in the government confirmed the decision. They said groups of ministers met Tuesday to discuss the formation of these committees and the agenda going forward.
For the government, a slowing economy has been a major concern, especially during the last financial year when GDP growth rate dropped below the original estimate of 7 per cent to 6.8 per cent. Growth rates were sequentially lower every quarter, with the last quarter (January-March 2019) growing just 5.8 per cent, the lowest in 20 quarters.
The setting up of specific Cabinet-level focused groups, chaired by the Prime Minister himself, underlines the government’s intention to address the obstacles to higher growth and private sector investment. Private investment has remained depressed for the past many years due to poor credit offtake with banks saddled with huge bad loans. The liquidity crisis in NBFCs since mid-2018 exacerbated the scenario with consumption expenditure — a major component of India’s growth story — too slowing down.
The Cabinet Committee on Growth and Investment will have five members and likely include Amit Shah (Home), Nitin Gadkari (Road, Transport & Highways and MSMEs), Nirmala Sitharaman (Finance and Corporate Affairs) and Piyush Goyal (Railways and Commerce and Industry), sources said. These ministries are key to attracting large private investments in infrastructure sectors and greenfield projects, facilitating ease of doing business, and clearing foreign investment proposals.
Economic growth and jobs are key to meet aspirations of the youth. The immediate impact of two decisions, GST and Insolvency Bankruptcy Code, on growth are slowly fading. The two new committees with specific mandate will ensure ministries are on the same page, and expedite decision-making.
The slowing growth has had its impact on jobs too. The unemployment rate for 2017-18, according to the Periodic Labour Force Study, stood at 6.1 per cent, the highest in the last four decades. The Cabinet Committee on Employment and Skill Development attempts to address the skilling and jobs problem holistically.
For one, it seeks to bring under one roof ministries such as HRD, Labour and Employment, and Skill and Entrepreneurship, which have worked at cross-purposes in the past. It will allow for an integrated approach while addressing issues related to skilling at school level, ITIs and the certification process in government and private skilling institutes.
Two, to ensure that skills being imparted are in tune with the job requirement and sectoral demand, the Cabinet Committee on Employment and Skill Development also proposes to include ministers representing various sectors such as agriculture, infrastructure, construction and manufacturing.
This Cabinet Committee, sources said, will have 10 ministers including those handling Agriculture and Rural Development, Railways, Housing and Urban Affairs, Petroleum and Natural Gas, Civil Aviation, Railways, Commerce and Industry, Finance and Home.