As global oil prices drop below $50 a barrel, creating a favourable economic outlook and a base for further fuel subsidy reforms, Prime Minister Narendra Modi wants measures to take advantage of this environment.

Besides oil, rising labour costs in China is in India's favour, as it raises our attractiveness for foreign companies which are keen to set up manufacturing units.

Modi attended a meeting on Friday with eminent economists and others in his first visit to the newly created NITI Aayog - he is its chairman. He sought views on four major areas of concern - the general economic scenario, methods to bring back fiscal prudence, steps to boost revenue and to rationalise spending. The need for a stable tax regime was also discussed. All aimed at putting India on a high-growth path.

The economists and experts included prominent names such as Vijay Kelkar, Nitin Desai, Bimal Jalan, Rajiv Lall, R Vaidyanathan, Subir Gokarn, Parthasarathi Shome, P Balakrishnan, Rajiv Kumar, Ashok Gulati, Mukesh Butani and G N Bajpai. NITI Aayog Vice-Chairman Arvind Panagariya was present, as were the two full-time members, Bibek Debroy and V K Saraswat.

NITI Aayog, facilitator for the meeting, will collate the suggestions and send it to the finance ministry for incorporation in the Budget for 2015-16, slated to be presented in the Lok Sabha on February 28. Finance Minister Arun Jaitley conducted the meeting.

Briefing reporters later, Jaitley said the meeting was organised "with regard to the state of the economy and steps required to boost investment, growth and even specific suggestions with regard to the Budget". NITI Aayog is also a "think tank" and the meeting was in that context, he added. Suggestions were also in relation to the financing of infrastructure, how to attract investment and boost domestic savings. The state of agriculture was particularly discussed, Jaitley said.

Sharply falling crude oil prices in the international market are likely to help India save a significant foreign exchange outgo, which with reasonable gold imports would help reduce the trade deficit and, hence, the current account deficit. The latter had widened to a five-quarter high of 2.1 per cent of gross domestic product (GDP) in the second quarter of 2014-15 from 1.7 per cent in the first quarter. The lower rates have also helped the government to undertake fuel subsidy reforms, beside curbing inflation. Further oil subsidy reforms are expected in the Budget.

The government's Make in India programme is expected to get a boost from rising labour costs in China and a slowing of its economy. The euro zone's continuing recession presents India as an attractive investment destination and market, though there are also minuses in the sense of declining imports from our largest export destination.

Modi said an objective of the NITI (National Institution for Transforming India) Aayog was to establish a dynamic institutional mechanism where "eminent individuals outside the government system" could contribute to policy.

According to an official statement, Modi emphasised the need for cooperative federalism and added he favoured healthy competition among states in development. The economists stressed the need for the government to work towards high growth, a predictable tax regime, fiscal prudence and rapid infrastructure development.

The government has already accepted the Bombay High Court's verdict in favour of telecom multinational Vodafone in a case related to share transfer to the parent company. It has said all such tax matters would be treated like this, putting an end to uncertainty over a big dispute between multinational corporations and the authorities in this respect.

It now is to be seen if Jaitley removes retrospective amendments on indirect asset transfers and royalty from the statute, beside deferring the General Anti-Avoidance Rule from the scheduled date of April 1.

The government has already committed itself to reining in the fiscal deficit at 4.1 per cent of gross domestic product (GDP), even though this overshot the full-year Budget Estimate by the first nine months of the current financial year. So, expenditure cuts are on the way, as Jaitley indicated on Friday. According to a fiscal road map laid out by Jaitley's predecessor, P Chidambaram, the Centre's deficit is to be reined in further at 3.6 per cent of GDP in 2015-16 and to three per cent the next year.

The Budget is expected to announce schemes to boost infrastructure for the Make in India programme and give a fillip to the economy.

The PM also spoke of the government's recent initiatives, including the Pradhan Mantri Jan Dhan Yojana, direct cash transfer of the cooking gas subsidy and Swachh Bharat.

Modi will now meet the chief ministers of all states and Lieutenant Governors of Union Territories on Sunday to discuss inter-state relationships, at the first meeting of the governing council of the NITI Aayog. The governing council comprises all of them.

The meeting is expected to provide further suggestions on an efficient processes and mechanism of interaction between Centre and states and between NITI and its stakeholders.