Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
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Raise investment, reform agriculture and codify labour laws: vision document 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. “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 vision 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. “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.
