A growth rate of 9% is essential to generate enough jobs and achieve universal prosperity, according to a vision document released by NITI Aayog.
Details of the document
The ‘Strategy for New India @75’ document recommends a number of steps, including increasing the investment rate, reforming agriculture, and codifying labour laws.
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.
Besides having rapid growth… it is also necessary to ensure that growth is inclusive, sustained, clean and formalised.
On boosting economic growth, the document identified two key steps for increasing the country’s investment rate and the tax-GDP ratio.
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.
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.
Achievements of NITI Aayog
The NITI Aayog was formed to bring fresh ideas to the government. Its first mandate is to act as a think tank.
It can be visualised as a funnel through which new and innovative ideas come from all possible sources — industry, academia, civil society or foreign specialists — and flow into the government system for implementation.
Initiatives like Ayushmaan Bharat, our approach towards artificial intelligence and water conservation measures, and the draft bill to establish the National Medical Commission to replace the Medical Council of India have all been conceptualised in NITI Aayog, and are being taken forward by the respective Ministries.