Prime minister Narendra Modi will meet NITI Aayog officials today to discuss the demonetisation impact on the economy and also to plan for the Union Budget to be presented on 1 February, according to media reports.
The government’s surprise decision to demonetise Rs 500 and Rs 1,000 notes on 8 November has impacted the consumption demand resulting in a cash crunch. A section of experts think the government or the RBI was not prepared to handle the situation effectively. The currency printing presses under the central bank and government had not printed enough cash of smaller denomination currencies even as the move sucked out about 86 percent of the currency in circulation.
The prime minister’s meeting with experts assumes significance as the cash crunch persists even as the deadline of 30 December, when Modi has promised the pain will end, is nearing.
The shortage has resulted in huge job losses in the informal sector, with construction workers being laid off in hordes.
Textile, tourism and jewellery sectors also have witnessed deep impact as slowing demand is pulling down the sales. Also, agriculture is another sector that has been crippled as farmers are holding back rabi sowing because of their inability to buy seeds and pay for the labour owing to the persisting cash shortage situation.
Many brokerage houses and economists have already reduced the GDP growth target for the current year, citing sluggish economic activity after the demonetisation announcement.
Meanwhile, the government’s efforts to push for transition into cashless economy has not paid off due to various issues including low internet penetration and speed.
According to a report in The Times of India, agriculture sector and jobs will be the focus area of the prime minister’s meeting today with NITI Aayog, which is expected to start at 11 am in the morning.
The meeting will be attended by 13 experts, including finance minister Arun Jaitley, NITI Aayog vice-chairman Arvind Panagariya, secretaries and a few others from outside, said reports in ToI and the Business Standard. The theme of the meeting, the ToI report says, is ‘economic policy: the road ahead’.
Apart from those mentioned above, according to the CNN-News18 report, the experts include Vivek Dehejia, professor with Carleton University in Canada, economist Surjit Bhalla and NITI Aayog chief executive Amitabh Kant.
The BS report says the team will have an initial discussion in the morning and they will split into three groups, who will again deliberate on the issues. They will again present their discussion outcomes in front of the PM in evening.
First Published On : Dec 27, 2016 10:24 IST