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NITI Aayog meet: Discussed on how to bring down tax rates, says VC Panagariya

As the National Institution for Transforming India (NITI) Aayog meeting concluded on Tuesday, vice chairman Arvind Panagariya interacted with the media to give details of all that was discussed between the Prime Minister and experts present.

“Prime Minister Modi said that India needs to invest more in tourism,” stated Panagriya. The vice chairman said that demonetization was discussed as a move towards transforming India into a formal economy. On budget related issues, there was a discussion on how to bring down the tax rate. Panagariya further stated that some speakers said that the revenue collected is a fraction of what is due. Commenting on this, the Prime Minister highlighted the need to address the issue and spend money more prudently.

He said that experts suggested on shifting towards high value agricultural products and doubling farm income by 2022. Apart from that, the meeting saw a discussion on digital payments for farmers.

Earlier in the day, economists and experts brainstormed on issues like job creation, agriculture and skill development, before briefing Prime Minister Narendra Modi on steps that could be taken in the upcoming budget. The theme of the meeting was ”Economic Policy Reform, Road Ahead.’

According to sources, 4-5 sectoral groups have been set up to discuss new initiatives and budget proposals.The mandate was to come up with concrete suggestions to neutralise the adverse impact of demonetization, push growth with special focus on employment generation and promote farm productivity. Once firmed up, the suggestions were placed before the Prime Minister later. As chairman of NITI Aayog, Modi had called a meeting of experts to take stock of the economy and receive feedback on ways to deal with the problems of cash crunch post demonetization.

During the session, participants shared their views on various economic themes such as agriculture, skill development and job creation, taxation and tariff related matters, education, digital technology, housing, tourism, banking, governance reform, data driven policy, and future steps for growth. The Prime Minister in particular, called for innovative approaches in areas such as skill development and tourism. Speaking about the budget cycle, he said this has an effect on the real economy.

He said that in our existing budget calendar, the authorisation of expenditure comes with the onset of the monsoon. This he said, results in government programs being relatively inactive in the productive pre-monsoon months. He said that keeping this in view, the date of budget presentation is being advanced, so that expenditure is authorized by the time the new financial year begins.

The meeting was attended by Finance Minister Arun Jaitley, Minister of State for Planning Rao Inderjit Singh, Vice Chairman NITI Aayog Arvind Panagariya, and senior officers from the Union Government and NITI Aayog. It was also attended by economists and experts including Prof. Pravin Krishna, Prof Sukhpal Singh, Prof Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Dr. Pulak Ghosh, Dr. Govinda Rao, Madhav Chavan, Dr. N.K. Singh, Mr. Vivek Dehejia, Pramath Sinha, Sumit Bose, and T.N. Ninan. The meeting assumes significance in the backdrop of various multilateral agencies and RBI lowering growth forecast for the current fiscal. The RBI has reduced the GDP growth forecast to 7.1% from 7.6% in its monetary policy review earlier this month.