Ahead of the yearly Union Budget demonstration, Prime Minister Narendra Modi on Monday socialized with leading business tycoons to talk about problems facing the market and steps necessary to improve growth and create jobs.
Richest Indian Mukesh Ambani, Tata group patriarch Ratan Tata, telecom czar Sunil Bharti Mittal, billionaire Gautam Adani, Mahindra Group chairman Anand Mahindra, and mining baron Anil Agarwal were one of those present in the dialogue.
Tata Sons chairman N Chandrasekaran, TVS chairman Venu Srinivasan, L&T mind AM Naik were present, as reported by a picture of the assembly released here.
Finance Minister Nirmala Sitharaman will introduce her next Union Budget on February 1 with a watch on reviving growth.
The most recent GDP statistics for its July-September quarter revealed a substantial additional moderation in the rate of economic expansion to 4.5 percent – the weakest in six decades, using a key contributory factor being a slump in producing output.
The Modi government has undertaken a variety of steps to arrest the growth slump. Back in September 2019, it declared a reduction in the corporate tax rate 22 percent from 30 percent. The authorities also reduced the tax rate for new production firms to 15 percent to attract new foreign direct investments. The tax rate discounts bring India based on prices in other Asian nations.
The government’s additional initiatives include bank recapitalization, the mergers of 10 public sector banks to four, service for the automobile industry, strategies for infrastructure spending, in addition to tax advantages for startups.
But specialists say none of those measures directly handle the prevalent weakness in consumption demand, that has become the main driver of the market.
Additionally, monetary sector fragilities continue to weigh on the economic development momentum, together with the high amount of non-performing loans on the balance-sheets of their public sector banks, constraining their new lending.
What’s more, there are also dangers from possible contagion effects from troubled non-bank financial companies (NBFCs) into the balance-sheets of several commercial banks, which may further weigh on the general rate of credit growth.
In reaction to this growth slump, the Reserve Bank of India (RBI) has eased coverage rates appreciably during 2019, using a streak of rate reductions since February 2019.
Additional stimulation measures are anticipated in the coming Budget in which the attention is very likely to be on reforms, such as some structural measures like reducing red tape and boosting foreign direct investment.
The meeting with industrialists is at the collection of talks which Modi has had throughout the past few months to seek hints to reestablish growth.
In the past meetings, he fulfilled Kotak Mahindra Bank CEO Uday Kotak, State Bank of India mind Rajnish Kumar, HDFC Bank managing director Aditya Puri, IT industry veteran TV Mohandas Pai; former finance secretary Hasmukh Adhia; Tech Mahindra CEO CP Gurnani, Intel India general director Nivruti Rai and Tata Consultancy Services chief executive Rajesh Gopinath.
He reportedly has held one-on-one meetings together with sectoral specialists.
Modi has up to now fulfilled over 60 businessmen and entrepreneurs from industries like FMCG, fund, renewable energy, diamond, retail, fabrics, MSMEs and startups and technologies.