NITI Aayog chief executive Amitabh Kant
Image: Amit Verma
Finance Minister Arun Jaitley’s proposal to phase out FIPB [Foreign Investment Promotion Board] in the 2017 Union Budget will boost the domestic economy and promote inflow of foreign direct investment (FDI) in the country, said the top brass of the think tank at The Verdict, a conference jointly organised by CNBC-TV18 and Mint on the Union Budget.
NITI Aayog chief executive Amitabh Kant said receipts of FDI in India have gone up significantly over the last two-and-a-half years. It has grown by 60 percent, while globally it has come down by 16 percent. “Most of the FDI inflow in the country currently takes place through the automatic route except in sectors like defence,” said Kant, at the panel discussion attended by Niti Aayog Vice Chairman Arvind Panagariya and former MP NK Singh.
While actively favouring India’s pursuit to globalisation, NITI panel members indicated that it will review the outcomes of various policy measures undertaken by the government. “We have prepared the outcome budget for every ministry. All that will be put on a dashboard and will be reviewed on a monthly basis,” Kant said.
So, will the focus on protectionism in global trade have an impact on India? “India needs to focus on competitiveness and ensure that its textile exports and garments get into the European markets. Budget 2017-18 has done a lot of structural changes in this regard,” said Kant.
As far as the domestic market is concerned, going forward, NITI Aayog will carry forward its effort to create jobs in the labour-intensive sectors. “A few months ago, we announced a package for the textile sector. Now, the same package is being extended in the footwear sector as well,” said Panagariya. Besides, the steps undertaken to provide a fillip to the MSME sector will further promote growth in the sector and in turn help create additional jobs, said Panagaria.
Jaitley, in his budget, pegged the fiscal deficit target at 3.2 percent for 2017-18 against the Fiscal Responsibility and Budget Management (FRMB) panel recommendation of 3 percent.
NK Singh, who headed the panel to review the FRBM Act, said the second generation fiscal reforms have escape clauses under several circumstances that have unintended economic consequences.