Structural weaknesses in the economy have been taken care of and India Inc should now make bold investment decisions to push up growth and help the economy reach the $5-trillion target, Prime Minister Narendra Modi told corporate leaders on Friday.
Speaking at an event to mark 100 years of industry body Assocham’s foundation, Modi said there would be investments worth Rs 100 trillion in the infrastructure sector over the coming years while Rs 25 trillion would be spent on the rural economy.
He added the government would spend Rs 3.5 trillion on delivering clean and safe drinking water to every household.
Referring to public discourse on the current ongoing economic slowdown, Modi said he refused to challenge the criticism of the government, and instead focused on positive signs of growth. However, repeatedly hitting out at the previous United Progressive Alliance government, Modi said gross domestic product growth had plummeted to only 3.5 per cent during one quarter.
He also said the inflation rate then was a high 9.4 per cent while the fiscal deficit was hovering at 5.6 per cent of GDP. GDP growth fell for six consecutive quarters to a six-year low of 4.5 per cent in July-September 2019 amid a sustained slump in manufacturing and declining consumption.
“I don’t want to engage in the debate over why some people (who are speaking now) were silent back then. The country’s economy has faced ups and lows earlier as well but now the economy has the resilience to reverse the current slowdown and return to a high-growth trajectory,” Modi said.
Achieving a $5-trillion economy is absolutely possible, he added.
Commenting on detractors who argued the target was unnecessary, Modi clarified he remained unfazed by criticism since the beginning. The government is working to end the inverted duty structure for goods, as a result of which the cost of manufacturing was going down.
Modi also stressed foreign direct investment (FDI) inflows had continued with more than 50 per cent of all inbound investments over the past 20 years being made during the past five years of the BJP government’s tenure. However, official statistics show equity capital investments have seen a 1 per cent dip in 2018-19 to $44.36 billion after scaling a peak of 35 per cent annual growth in 2015-16.
The prime minister said India’s rank was 142nd among all countries on the ease of doing business, which has now risen to 63rd, and noted that India was among the top 10 nations which had in the last three years made continuous improvement.
Seeking support for the comprehensive policymaking which led to this, Modi said he had to suffer anger and allegations directed at him, and talked of the support Indians allowed him to achieve it.
In the 50-minute speech, Modi took digs at industrialists in the audience. Referring to the government’s decision to decriminalise offences under the Companies Act, Modi said people should not forget how difficult it was to do business under the earlier regime.
After a round of claps from the audience, he said the claps were not loud enough and many people seemed not to know what his government had done.
Modi stressed the government had been successful in achieving 100 per cent “open defecation free” status over a period of 60 months, in time for Mahatma Gandhi’s 150th birth anniversary.