Measures to stimulate economy expected; GST Council meets today

A day after promising to take all necessary steps to revive the economy and fix the problems faced by businesses on account of the switchover to the Goods and Services Tax regime, Prime Minister Narendra Modi held extensive talks with BJP president Amit Shah and Finance and Corporate Affairs Minister Arun Jaitley on Thursday.

FinMin skips WEF meet

The top-level discussions could be a precursor to some relief measures that may be announced as early as Friday when the GST Council meets in the capital, as the discussions stretched till late evening, compelling Mr. Jaitley to skip the World Economic Forum’s India Economic Summit. Mr. Jaitley was scheduled to address about 450 delegates at the summit to discuss India’s economic, political and social outlook from 7.15 p.m. till 8 p.m.

Lack of jobs

Incidentally, at least two of the co-chairs of the Summit voiced concern about the lack of jobs, layoffs among top firms and the lack of easy bank credit for small and medium enterprises.

While Mastercard US president and CEO Ajay Banga said that jobs were the one challenge that India needed to address, Bharti Enterprises chairman Sunil Bharti Mittal voiced concern about ‘employment reduction’ by the top 200 Indian firms and mooted a rethink on businesses’ approach to society.

“The distribution of wealth has not reached all levels of society. All that is causing a lot of stress to the political system,” Mr. Mittal pointed out.

Mr. Shah also rushed to the capital for the meeting with the PM, abandoning his original schedule that included taking part in the politically significant Janaraksha Yatra in Kerala led by the State unit president Kummanam Rajasekharan over a stretch that includes the native place of the State’s Chief Minister Pinarayi Vijayan.

While the RBI revised India’s growth projections for this year downwards from 7.3% to 6.7% on Wednesday, the PM had on the same evening slammed critics for spreading pessimism about one bad quarter, referring to the decline in the country’s GDP growth to 5.7% in the first quarter of 2017-18.

The PM had asked the GST Council to review all the problems arising from the new indirect tax regime. He assured traders that the government was not opposed to necessary changes to simplify the system that had been beset with problems in IT infrastructure for filing returns, hold-ups in tax refunds and confusion about the constantly evolving rules of the game, since its rollout this July.

Mr. Modi had also generated hope about some policy decisions to reverse the declining growth path when he said: “This is correct that in the last three years after achieving an average growth of 7.5%, this year in April-June quarter the GDP growth fell. We don’t deny it. But this is also a fact that the government is committed and capable of reversing this trend.”