Voicing concern over India’s sluggish private investments and flight of foreign capital, the parliamentary standing committee on finance decided at its meeting on Thursday to prepare a report that would diagnose the problems ailing the Indian economy, and present a prescription to the government with solutions in three weeks’ time.
The Bharatiya Janata Party (BJP) Lok Sabha member Bhartruhari Mahtab-chaired committee met here in the morning, where it listened to presentations on the “general economic situation in the country” by Chief Economic Adviser (CEA) V Anantha Nageswaran and Economic Affairs Secretary Anuradha Thakur. Members of the Mahtab-led panel sought responses from government officials on the impact of the West Asia conflict on India’s economic situation, inflationary pressures, and also on China’s recent “stringent” rules in protecting its industries.
“Despite the serious headwinds for the Indian economy, there are some good indicators, such as household savings, which have increased compared to last year,” Mahtab said after the meeting.
Committee members said the challenge the government faces is that while public capital expenditure remains healthy, private investments have not picked up. “It is a challenge that we have to address,” Mahtab said, adding that the committee decided to meet again towards the third week of this month, and will prepare a report diagnosing the problem and prescribing solutions which “the government should” take.
He said another “major concern” was the flight of foreign investments. The CEA explained that foreign investments are cyclical in nature, which were healthy in the preceding three-year period, and now there is a dip. Committee members flagged the falling value of the rupee. The discussion noted that investors are investing more in the US, and that the interest index post-2022 has increased in some of the developed economies, with Japan giving 2 to 3 per cent interest on certain bonds, while earlier emerging economies attracted these investments.
Mahtab and other members recognised that the government has taken steps to control price rise. They pointed out that policy changes are required to invite those exiting China to invest in India, explaining to them the support that New Delhi can provide. Officials said despite challenges, India’s economy has emerged stronger. The trade agreement under negotiations with the US was also discussed. Apart from Mahtab, others who attended the meeting included Congress MPs Pramod Tiwari, Gaurav Gogoi and Manish Tewari, BJP MPs P P Chaudhary and Dinesh Sharma, and LJP (R) MP Arun Bharti, among others.