Economy recovered faster than expected, says PM Narendra Modi

Leaving behind a ‘rocky year’, economic indicators have begun to look encouraging and the recovery is going to be ‘faster than expected’, Prime Minister Narendra Modi said on Saturday. Even as farmer unions have intensified their agitation against the new agriculture marketing laws, Modi strongly defended the laws, saying the laws, part of his government’s efforts to unshackle each segment of the economy, would help multiply farmers’ incomes.

Addressing the annual convention of industry body Ficci in the capital, Modi said: “Farmers now have the option to sell outside the mandis, to private sector and even on digital platforms. There are unlimited possibilities arising out of the opening up of the  agriculture sector.” Pointing out that private investments in the farm sector have been far from adequate, he appealed India Inc to take ‘interest and invest’ in the sector. “Some are doing good work, but it is not sufficient. The farmers’ incomes will grow as much as you invest in the sector,” Modi told the gathering of business heads.

He cited the example of the government’s focus on 10% ethanol blending in auto fuels, and underscored that this helped clear payments to sugar farmers by millers.“Earlier there was the option either to produce sugar or jaggery from cane. But with the priority given to ethanol production, farmers’ incomes will also rise and create employment opportunities,” he said.

The PM said in the last six years, his government has been encouraging stakeholders in all sectors. “This is reflected in the all-round reforms in sectors ranging from manufacturing to MSME, agriculture to infrastructure, from tech industries to taxation and from real estate to regulatory easing,” he said.

Making a strong pitch for the positive changes in the rural, semi-rural areas as well as tier-2 and tier-3 cities, he invited senior business and industry leaders to take benefit of the opportunities in such areas. He pointed out that the number of the internet users in rural areas has surpassed the cities and said more than half of India’s startups are now in tier-2 and tier-3 cities. Mentioning the recently approved PM-WANI for public wi-fi hotspots, he said entrepreneurs should become partners in rural connectivity efforts. “It is certain that in the 21st century, India’s growth will be driven by villages and small cities… Entrepreneurs like you should not lose out on the opportunity to invest there,” Modi said.

India’s real gross domestic product (GDP) shrank 7.5% in September quarter, a contraction much narrower than feared by many, including the Reserve Bank of India (RBI). The economy contracted at a record 23.9% in the first quarter of the fiscal; that was the steepest slide among G-20 countries. Industrial production growth scaled an eight-month peak of 3.6%, year-on-year in October, driven by inventory building to cater for festive demand. However, analysts still advise caution in interpreting the latest economic indicators.

On foreign capital inflows, Modi said even during the pandemic, the country saw record foreign direct investments and foreign portfolio investments. Modi cited success of financial inclusion through the trinity of JAM (JanDhan, Aadhaar and mobile) as the best example of his government’s planned and integrated approach to reforms.