NEW DELHI: A new drive by the Centre for job creation, lower tax rates, encouraging private investment, ramping up ailing infrastructure, education and a massive infusion of money into the rural sector is on the cards. The three-year Action Plan being drafted by the NITI Aayog, to see the daylight next month, is likely to be the guidebook for the Finance Ministry to firefight the pitfalls of demonetisation. Prime Minister Narendra Modi had asked the planning think tank to draft an additional “15 years Vision Document” to help India embark on a broad-based socio-economic growth path, with measurable outcomes on various parameters.
“The Action Plan is coming at the most challenging time. Demonetisation has dried up liquidity in the market. This may lead to significant job loss in the organised and unorganised sector in the short term. The Action Plan will lay down a path of less tax and low interest rates to boost buying power among the low-income and middle-income population,” said a NITI Aayog member, who is overseeing the final blueprint for the ambitious exercise.
The new three year Action Plan being drafted by the NITI Aayog is expected to garner a significant amount of money as “windfall” gains from demonetisation. Tax collections on account of anti black money-ops will also help. “School dropout rate after Class V is about 50 per cent, while the teacher-student ratio is at an atrociously low level of 30:1. In the short term, massive financial resources need to be poured in to improve the quality of education and beef up the educational infrastructure. The Action Plan will list measures to achieve the target,” NITI Aayog sources stated.
The body is ready with an amendment bill on the Medical Council of India (MCI) which envisages a transparent institutional mechanism to fill in the shortfall of five lakh doctors with both entry-and-exit standardised examinations. The Plan will also list steps needed to address the lower-than-Vietnam ratio of one doctor for every 1700 patients.
Since the Union Budget will be presented on February 1, the Finance Ministry is awaiting the Action Plan to achieve eight plus GDP growth. “The foremost challenge is employment generation in the organised and unorganised sector. The construction sector can give a multiplier effect to the economy only when there is an insatiable appetite for housing in the rural and urban areas. The Action Plan will address existing impediments in the construction sector using lower tax rates, besides other incentives,” sources added.
Incidentally, Modi is pinning much of his hopes on agricultural growth to kick-start the economic cycle. “The economy is suppressed because private investment is not taking place. This will happen only if there is a tangible scope for the expansion of manufacturing. This can happen only in rural India. The time has come to pour substantial financial resources into agriculture infrastructure and rural development. Much groundwork has been done to take a leap of faith in terms of public investment in the rural and agriculture sector. The Action Plan will spell out the necessary measures,” added the NITI Aayog member.