JOIN USJob creation my highest priority, says Modi
Prime Minister Narendra Modi on Monday sent across the message to the international media and investor community that India was on course of major administrative and policy reforms, aimed at creating more jobs in all sectors, and lifting farmers out of poverty.
Addressing the Bloomberg India Economic Forum, 2016, he said at a time when the world economy was slowing, India had low inflation, a low balance of payments and current account deficit, high FDI flows and a high rate of growth.
He said he was particularly “thrilled” at whopping FDI flows in rural sector which showed his government commitment was being complimented by better response from investors.
“From October 2014 to September 2015, FDI in fertilizer was $224 million compared to just $1 million in the period of October 2013 to September 2014; in sugar, it was $125 million compared to just $4 million; in agricultural machinery, it doubled to $57 million from $28 million. These are sectors that are closely connected with the rural economy. I am thrilled to see that foreign investment is flowing into them,” he said.
“This is the result of good policy, not good fortune,” Modi said, in a veiled attack to Opposition parties which maintain that Modi has been lucky as inflation has fallen due to lower crude oil and commodity prices in the world market.
Modi said, the fall in crude oil prices were steeper in 2008-09 (from $147/barrel to $50/barrel) but inflation, fiscal deficit and current account deficit were still high then.
He said that despite bad monsoon in 2014 and 2015 followed by unseasonal hailstorms, India’s food grain production remained much higher and food inflation much lower.
High growth rate
“Our growth rate is acknowledged as the highest among major economies. There are some who remain confused and have said that the growth rate does not ‘feel’ right,” he said elaborating on fast pick up in credit off take from banks, growth in certain manufacturing sub-sectors like apparel, FDI inflows particularly in employment intensive manufacturing, construction and agriculture sectors.
He said employment generation was his highest priority in the “capital scarce, labour abundant” country like India and spelt out steps taken by his government.
“If any firm subject to tax audit increases its work force, it will get a 30% weighted tax deduction on the extra wage cost for three years. Earlier, such a benefit was available only to very few industrial employers and had so many restrictions that it was practically ineffective. It will now cover all sectors including services, for employees with a salary up to Rs 25,000 per month,” he said.