PM to seek India Inc input on economy

Meeting with industry captains on July 29; rupee depreciation, other issues to be discussed

Manmohan Singh

Even as the rupee slid to its lowest level against the dollar in early trade, the Prime Minister’s Office said on Monday that he’d convened a meeting with captains of industry on July 29 on these and other issues of concern on the economy.

Singh will deliberate on measures to correct the current account deficit (CAD) and to revive industrial growth, besides taking stock of the rupee’s depreciation against the dollar and its impact on trade and industry, the PMO said.

The statement came on a day when the rupee fell to a record low of 61.21 against the dollar before recovering a bit by the close of the day.

As capital flows dwindle, India could be in a precarious position on the funding of its huge CAD. After touching a record 6.7 per cent of GDP in the third quarter of 2012-13, the CAD fell to 3.6 per cent in the fourth quarter. Over 2012-13, it was a record 4.8 per cent of GDP, against 4.2 per cent a year before.

When asked, chambers of business said they were yet to receive the PMO invitation.

After economic growth slipped to five per cent in 2012-13, the authorities have been looking for signs of recovery. However, these haven’t been forthcoming. Industrial growth was just two per cent in April despite the low base of minus 1.3 per cent a year before.

Nor has the external sector performed the way policy makers expected. In April, merchandise exports rose just 1.7 per cent to $24.2 billion. With imports rising 11 per cent to $42 bn, the trade deficit was a little over $17 bn against $14 bn a year before. In May, exports declined 1.1 per cent to $24.5 bn. With imports rising seven per cent to $44.6 bn, the trade deficit was a little over $20 bn and very close to the record of $20.96 bn in October 2012.

The meeting between the PM and corporate bigwigs will also discuss skill development and ways of accelerating it. The proposed development of the Delhi-Mumbai Industrial Corridor, the Chennai-Bangalore Industrial Corridor and the Amritsar-Delhi-Kolkata Industrial Corridor will also come up.

To revive growth, the PM already has set targets for various infrastructure sectors for 2013-14. He recently reviewed the status of major infra projects and tasked various ministries to roll out public-private-partnership (PPP) projects worth at least Rs 100,000 crore in the next six months, from identified projects worth Rs 115,000. These included the Mumbai Elevated Railway Corridor, two new locomotive projects, one expressway project between either Delhi and Jaipur or Delhi and Ludhiana, and a new port each in West Bengal and Andhra Pradesh.

Topics to be discussed in the meeting with India Inc

Measures to correct Current Account Deficit

Measures to revive industrial growth 

Depreciation of the rupee and its impact on trade and industry

Skill development and ways of accelerating it

Development of industrial corridors: Delhi-Mumbai, Chennai-Bangalore, Amritsar-Delhi-Kolkata Industrial Corridor