ndia's growth metrics would not stop due to the ‘bold’ decisions taken by the government. In fact, on the back of a cleaner and formalised economy, India, could soon be back on the high growth trajectory, feels economist and vice chairman of NITI Aayog, Rajiv Kumar
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“We are at the cusp of major economic changes. With cleaner and formalised growth we will touch double digit growth in years to come,” said Kumar, addressing the European Business Group (EBG) and EU diplomats at the launch of the Indian Direct Selling Association and EBG's annual India position paper, 2018.
Crediting the government's 'bold' decision to reverse the informal headwinds in India's economy, Kumar said that the effects of the 'medicine' would soon be visible. “The recovery from the double impact of demonetisation and GST is almost complete. Now, as Prime Minister Narendra Modi says, by 2022, India would have embarked on establishing a cleaner economy,” Kumar said.
India has been credited by the World Bank for large numbers of Jan Dhan accounts opened as part of the government's various subsidy, scholarship and other welfare schemes. “Jan Dhan bank accounts itself lead to massive formalising of the economy,” said Kumar.
Talking about the immediate benefits from formalising the economy, the NITI Aayog head said that India's economic growth this year will be unprecedented. “We will beat IMF's estimate to grow at 7.4 per cent this year,” he said.
The rollout of GST, too, is believed to have given a leg up to the government in its intent for formalising the informal trade sector. Kumar said he hoped that India would be able to bring down its fiscal deficit by '2 to 3 per cent at the end of this year.'
He, however, added that he does not consider fiscal deficit as an indicator of bad health of the economy. Foreign multi-lateral agencies including the IMF and World Bank often indicated India's fiscal deficit to be a 'concern'.
“One rather needs to be careful about the state's revenue deficit I would say,” Kumar said, countering claims of the EU representatives, that India always seems to be at the cusp of a growth boom and remained so for last 15 years.
Delivery of governance would also be getting better in the next few years, the NITI Aayog vice-chairman said. “Starting with the Jan Aarogya scheme, we are developing a system, whereby all flagship schemes could be monitored real time on a data portal,” Kumar said speaking to THE WEEK at the sidelines of the event.
He said that the Modi administration seeks to improve on accountability, better delivery of public services and targeted inclusion to a formal economy. Prime Minister Narendra Modi is the chairman of NITI Aayog, the government's prime policy advisory body.
“The idea is to convert India from a soft state to a development state. To do that, we must ensure that the investment cycle which has started to perk up now, maintains this course over a long period,” Kumar said, on the issue of hike in government investment versus a drop in private investments.
To boost India's foreign trade, Kumar said, that the government is also likely to renew focus on the development and export aids for small and medium enterprises. All this and more, according to Kumar, are to be encompassed as part of the 'New India Vision: 2022' document, that Kumar, as head of NITI Aayog and his team in the policy body are these days busy giving final touches to.