A growth rate of 9% is essential to generate enough jobs and achieve universal prosperity, according to a vision document released by NITI Aayog on Wednesday.
Towards this, the ‘Strategy for New India @75’ document recommends a number of steps, including increasing the investment rate, reforming agriculture, and codifying labour laws.
“An annual rate of growth of 9% by 2022-23 is essential for generating sufficient jobs and achieving prosperity for all,” the report, which was launched by Finance Minister Arun Jaitley, said in the introduction. Later in the report, NITI Aayog said the target should be 8% growth over the period 2018-23.
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“This will raise the economy’s size in real terms from $2.7 trillion in 2017-18 to nearly $4 trillion by 2022-23,” it said. “Besides having rapid growth… it is also necessary to ensure that growth is inclusive, sustained, clean and formalised.”
On boosting economic growth, the document identified two key steps for increasing the country’s investment rate and the tax-GDP ratio.
“To raise the rate of investment (gross fixed capital formation as a share of GDP) from about 29% in 2017-18 to about 36% of GDP by 2022-23, a slew of measures will be required to boost both private and public investment,” it said.
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“India’s tax-GDP ratio of around 17% is half the average of OECD countries (35%) and is low even when compared to other emerging economies like Brazil (34%), South Africa (27%) and China (22%).”
“To enhance public investment, India should aim to increase its tax-GDP ratio to at least 22% of GDP by 2022-23,” the report added.
While demonetisation and GST have and will continue to contribute positively, the document said efforts need to be made to rationalise direct taxes for both corporate tax and personal income tax.
It further said that there was a need to ease the tax compliance burden and eliminate direct interface between taxpayers and tax officials using technology.
“In agriculture, emphasis must shift to converting farmers to ‘agripreneurs’ by further expanding e-National Agriculture Markets (e-NAMs) and replacing the Agricultural Produce Marketing Committee (APMC) Act with the Agricultural Produce and Livestock Marketing (APLM) Act,” the document said.
“The creation of a unified national market, a freer export regime and abolition of the Essential Commodities Act are essential for boosting agricultural growth,” it said.
The document also called for a strong push towards ‘Zero Budget Natural Farming’ (ZBNF) techniques that reduce costs, improve land quality, and increase farmers’ incomes.
In the infrastructure section, it said the share of freight transported by coastal shipping and inland waterways will be doubled by 2022-23.
“Initially, viability gap funding will be provided until the infrastructure is fully developed,” the document said. “An IT-enabled platform would be developed for integrating different modes of transport and promoting multi-modal and digitised mobility.” In order to enhance rural connectivity and access to government programmes, it said that by the end of 2019 all 2.5 lakh gram panchayats will be “digitally connected” under the Bharat Net programme.
“In the next phase, the last mile connectivity to the individual villages will be completed,” the document said. “The aim will be to deliver all government services at the State, district, and gram panchayat level digitally by 2022-23, thereby eliminating the digital divide.”