Prime Minister Narendra Modi is set to preside over a series of high-stakes meetings in December, paving the way for the formulation of the upcoming Union Budget and shaping India’s economic trajectory. These crucial gatherings, strategically timed ahead of the annual NITI Aayog conclave with chief ministers, will involve discussions with state chief secretaries and finance ministers, ensuring a coordinated approach to national development.
A key meeting scheduled for early December will bring together state chief secretaries under the aegis of NITI Aayog, the federal policy think tank. This three-day conclave, commencing on December 13th, serves as a vital preparatory step for the subsequent NITI Aayog Governing Council meeting, where Prime Minister Modi will engage directly with chief ministers. The objective is to pinpoint key issues and concerns from the states, enabling proactive addressing before the budget’s presentation.
The upcoming NITI Aayog Governing Council meeting is anticipated to be a platform for states to articulate their expectations from the next Union Budget. Complementing this, Finance Minister Nirmala Sitharaman will hold separate budget consultations with her state counterparts in Jaisalmer on December 20th. This dual-track approach ensures comprehensive engagement and consideration of diverse state-level perspectives.
While state governments will undoubtedly emphasize the need for increased resource allocation and fiscal support for various schemes, the central government is equally focused on encouraging states to implement reforms that attract investment and stimulate economic growth. This echoes the discussions held at the previous NITI Aayog Governing Council meeting in July, where a vision for a $30 trillion economy by 2030 was outlined. Prime Minister Modi’s subsequent call for states to develop their own detailed vision documents with tangible goals underscores the commitment to achieving this ambitious target.
NITI Aayog is actively developing an investment index that will analyze state-level policies and measures, highlighting both their effectiveness in attracting investments and any potential bottlenecks. This data-driven approach aims to optimize policy interventions and ensure resource allocation aligns with impactful economic strategies.
Experts weigh in on crucial issues:
Economists offer valuable insights into the key challenges and opportunities expected to dominate Centre-state discussions. N.R. Bhanumurthy, director of the Madras School of Economics, highlights the critical issue of resource transfer to states and the need for a strategy ensuring balanced regional growth. He points out that disparities persist despite adequate financial resources in some cases, emphasizing the importance of effective resource utilization, particularly given the prevalence of competitive populism in the Indian political landscape.
Rumki Majumdar, economist at Deloitte India, underscores the importance of shielding the domestic economy from geopolitical uncertainties, leveraging technology for societal advancement, and enhancing human capital. The impact of global events such as the war in Ukraine and shifts in the US administration are expected to influence policy decisions. The need to bolster domestic demand, reduce reliance on external factors, and spur private investment are deemed crucial to mitigating these risks.
Addressing the technological impact on job creation is equally important. While technology enhances productivity, it also necessitates proactive strategies to manage job displacement and harness technological advancements to create opportunities in priority sectors such as agriculture, health, and education. The potential of artificial intelligence to contribute to societal development is highlighted as an area requiring focused attention. The queries sent to the Prime Minister’s Office and NITI Aayog Vice Chairperson Suman Bery remained unanswered at the time of publication.
