Imbibe spirit of competitive cooperative federalism: PM Narendra Modi

Asks states to improve business climate as a priority, to attract investment

As India tries to improve its ranking in the ease of doing business report of the World Bank from low of 130,

Prime Minister Narendra Modi asked states to accord priority for creating a conducive business climate, mixing the the spirit of cooperative federalism with competition to attract investment.

And, requested them to maximise use of Aadhaar, the citizen identification system, in their programmes and plans.

In the backdrop of farmer unrest, the PM also laid emphasis on agricultural reforms, including e-national agri marketing initiatives. He was addressing a day-long conference of state chief secretaries on a theme of 'States as drivers for transforming India'.

Madhya Pradesh's chief secretary talked about the pitfalls of developing too fast on the agriculture front.

The PM did not mention the impact of farm debt waivers on fiscal deficits. However, Niti Aayog officials stressed that states could not raise their borrowings beyond the limits set by the Fiscal Responsibility and Budget Management (FRBM) Act, unless the Union government agreed.

The PM said: "The whole world today has trust in India, has expectations from India and wants to partner with India. This is a golden opportunity for us. Ease of doing business should be accorded top priority and would greatly help states in attracting investment."

Aayog vice-chief Arvind Panagariya recounted the PM mentioning that there would a food processing sector event in November, where the Centre could bring potential investors; yet, it was for states to attract them.

India had improved only a notch to 130th place among countries on the World Bank's ranking on 'Ease of doing business', from 131st in 2015.

Modi stressed on food processing and agricultural reforms such e-marketing to increase farm growth. He also spoke on eliminating wastage in farm produce.

Asked about the impact of farm debt waivers on fiscal deficits, Panagariya explained that it was for the Centre to give relaxation to states for expanding of market borrowing beyond the FRBM levels. "The Centre itself is conservative about its fiscal deficit targets," he said.

On Aadhaar, the PM said its use had brought benefits all round and eliminated leakages. He urged all to maximise use of the 12-digit biometric identifier, in the interest of good governance.

He said the recent initiative of a Government e-Marketplace (GeM) for procurement would provide efficiency, savings and transparency in this regard. He asked all states to maximise its use, within a month.

In his presentation at the conference, Panagariya termed under-employment the biggest economic challenge. He called for devising of strategies to make small enterprises larger and to shift labour from agriculture to industry.

Spending on social priorities such as education, health and infrastructure could, he said, be raised only by enhancing economic growth.