Modi meets key ministers, economists to discuss 100-day reform agenda

New Delhi: Prime Minister Narendra Modi on Monday huddled with senior ministers, top bureaucrats and economists to draw up a 100-day roadmap for “next-generation reforms” aimed at sustaining India’s growth momentum and insulating the economy from fresh US tariffs on exports, three persons familiar with the development said on condition of not being named.

The meeting was attended by home minister Amit Shah, finance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal, Railways minister Ashwini Vaishnaw, secretaries of key departments, and select economists.

“Chaired a meeting to discuss the roadmap for next-generation reforms. We are committed to speedy reforms across all sectors, which will boost ease of living, ease of doing business and prosperity,” the Prime Minister said in a social media post.

Individual ministries have been urged to come up with tailored measures towards the 100-day agenda to accelerate India’s economic growth, one of the persons quoted above said. Another issue that was deliberated was the impact of tariffs that the US has imposed on Indian exports, said the second person.

Notably, the 25% reciprocal tariffs on Indian exports that US President Donald Trump imposed came into effect on 7 August. This may double to 50% on 27 August after additional tariffs imposed for New Delhi’s oil trade with Russia kick in.

Given that such high tariffs could impact Indian exporters’ competitiveness in their largest export market, policy makers are keen to step up domestic consumption demand and, thus, capacity utilisation in factories, which will ensure jobs are protected.

Modi had highlighted the need for faster economic growth in his Independence Day speech on Friday. “We want to grow fast,” Modi said in his speech while announcing that a task force will give recommendations in this regard.

Current law, practices, procedures, etc, should be aligned to the 21st century and the global environment, and should aid India in becoming a developed country by 2047, Modi had said in his address.

Building up

The theme of stimulating the economy through reforms was already in motion early this financial year as Sitharaman presented a reform-focused budget in February with big cuts in income tax, welfare targets for inclusive growth, and across-the-board reforms especially in regulatory framework, taxation and the financial sector.

Policy makers believe cutting red tape and making it easier to do business can unleash the entrepreneurial spirit of people, which can help to achieve much more than what the government and state-run firms can do directly, the people cited above said.

While agriculture and services are performing well, the government wants to increase the share of manufacturing in the economy, which can fetch more and better paid jobs to people. The Centre has also launched several schemes to address the skill gap among the youth that affect their employability.

India’s GDP is projected by the Reserve Bank of India (RBI) to grow at 6.5% this financial year. Above normal monsoons, the income tax relief announced in the budget, and a 100-basis points reduction in RBI’s repo rate are also expected to support growth this year.

On 14 August, Mint reported that the government has asked 37 ministries to submit a detailed report on the key compliance requirements that are creating roadblocks for manufacturers, exporters, investors and small enterprises, and hurting their ability to conduct their businesses smoothly.

Subhash Narayan contributed to this story