House panel to review aspects of slowdown in the economy
The Indian economy, one of the fastest-growing major economies in the world, saw growth fall to 5% in the April-June quarter, the lowest in over six years.Updated: Oct 31, 2019 00:47 IST
Parliament’s standing committee on finance plans to conduct a wide-ranging review of several aspects of the Indian economy amid concerns of slowing growth. The panel, headed by former Union minister Jayant Sinha, also the junior minister of finance in the first Narendra Modi government, has listed 15 subjects including “the state of Indian economy”, “quality of supervision and oversight of financial institutions” and “efficacy of overall taxation framework including direct and indirect taxes” that it will look at.
The committee coordination section of Parliament’s secretariat has issued a note listing subjects picked by panel for debate.
The note, signed by Rajya Sabha secretary general Desh Deepak Verma, has been seen by HT.
The Indian economy, one of the fastest-growing major economies in the world, saw growth fall to 5% in the April-June quarter, the lowest in over six years. In its latest monetary policy review, the Reserve Bank of India downscaled India’s growth forecast in 2019-2020 to 6.1% from 6.9%.
The slowdown is evident across consumption as well as investment; earlier this month, a Nielsen report pointed out that consumption of packaged goods in rural India had hit a seven-year low.
The government has unveiled a raft of measures to tackle the slowdown, including reducing corporate tax rates significantly, especially for new manufacturing units. There has also been talk of streamlining the Goods and Services Tax (GST) regime.
The slowdown has also been accompanied by a crisis among shadow banks (aka non-banking finance companies) and some banks, the latest instance being the fraud at the Punjab and Maharashtra Co-operative Bank in Mumbai.
The standing committee will also review “inflation targeting guidelines and monetary transmission”, “strengthening credit flows across the economy”, “analysis of the disinvestment programme” and implementation of the Insolvency and Bankruptcy Code, among other issues. It has also picked the “financing rural development and the role” of National Bank for Agriculture and Rural Development (Nabard) for debate.
The finance panel of Parliament, traditionally, has been headed by an opposition party MP. This time, the chairman’s post has gone to Sinha, a Bharatiya Janata Party (BJP) leader.
Kristalina Georgieva, the new chief of the International Monetary Fund (IMF), has said the global economy is witnessing “synchronized slowdown” and its effect is “more pronounced” in emerging markets such as India. In a speech, ahead of the IMF-World Bank autumn meetings next week, Georgieva said slower growth is expected this year in nearly 90% of world economies.
The panel will be talking to officials, sector experts and other stakeholders before arriving at its conclusion — a report. A parliamentary standing committee report is not binding on the government, but it reflects the mood of different parties and often provides constructive suggestions.