Indian Economy Has Resilience To Reverse Slowdown, Says PM Modi
The Indian economy has the resilience to reverse the current slowdown and return to high growth trajectory, Prime Minister Narendra Modi said Friday, even as he exhorted corporates to take bold investment decisions to help push up GDP growth.
Modi highlighted his government's decisions, such as decriminalisation of corporate offences, and promised them that "no inappropriate action will be taken on genuine corporate decisions".
Speaking at an Assocham event in New Delhi, he said Rs 100 lakh crore will be spent on infrastructure in the coming years and another Rs 25 lakh crore on rural economy. This will help nearly double the size of the Indian economy to $5 trillion by 2024.
"I am fully aware of the discussions happening around (current economic slowdown). I don't challenge comments made on it. I try to take away positives from such discourse," the prime minister said.
Economic growth had fallen to 3.5 percent in one of the quarters during the previous Congress-led United Progressive Alliance regime, he said, while retail inflation hovered at 9.4 percent, core inflation at 7.3 percent and wholesale inflation at 5.2 percent. The fiscal deficit had widened to 5.6 percent of the GDP.
During the tenure of the second Modi government, India’s GDP growth rate has fallen for six consecutive quarters to an over-six-year low of 4.5 percent in July-September 2019, amid slump in manufacturing and declining consumption.
"I don't say why some people were silent when GDP growth rate slipped quarter after quarter," he said. "These kinds of ups and downs (in economic growth) have been seen in the past, but the country has the potential to come out of these circumstances," he said, exuding confidence of returning to a high growth trajectory.
The prime minister highlighted India's progress in World Bank’s Ease of Doing Business rankings—from 142 in 2014 to 63 in 2019. India is among the top 10 nations which have in the last three years made continuous improvement, he said.
"This hasn't come without having to face anger and allegations from people," Modi said. "We have been told that we are corporate agents. But we are agents of 130 crore Indians."
He said many provisions of the Companies Act, 2013, have been decriminalised and more amendments will follow. Also, companies facing failures have been given exit routes in the Insolvency and Bankruptcy Code, he said.
"I want to assure the banking and corporate world that we have been able to overcome weakness in the system to a large extent. And so they should now take bold decisions fearlessly, invest boldly and spend undauntedly. I want to assure that no inappropriate action will be taken in case of genuine commercial decisions," he said. He, however, said the interest of the labour force should also be taken care of.
PM Modi said the time taken to register companies has been cut to few hours from months and better infrastructure has enabled the cut in the turnaround time at airports and ports. Dynamic changes have been made in Goods and Services Tax on the suggestion of trade and industry, he said. "We are not afraid of any challenges."
India received highest foreign direct investment during the last five years and its global competitiveness has improved, Modi said, adding that the country has the third-largest startup ecosystem in the world.