With the 12th Nehruvian Five Year Plan coming to an end on March 31st this year, the NDA government’s NITI Aayog presented it’s three-year action agenda on April 23rd, 2017 during the think tank’s Governing Council meeting in New Delhi.
The three-year-action agenda will comprise executive decisions and then the seven-year mid-term strategy and a 15-year vision document, both of which are in progress at present. NITI Aayog’s three-year draft action agenda details sector-wise expenditure allocation for three years, proposes shifting additional revenues to high order sectors counting health, education, defence, roads among others, doubling farmers’ income by 2022, creating jobs, bringing down land prices, transport and digital connectivity and building an inclusive society.
The government’s think tank has called for contracting the import duty on gold to clamp down on smuggling, as it is seemed that making it available will not only reduce incentives for illegal transactions but it will also help in safeguarding availability of gold to small and medium firms, thereby giving a boost to the share of gold jewellery produced by the sector. The government had re-introduced import duty on gold in 2013 to trim current account deficit. The duty is now at 10%.
One of the co-authors of the ‘Three-Year Agenda’, Bibek Debroy has proposed bringing the agricultural income under the tax net in its three-year action plan. Debroy said since he doesn’t believe in a rural and urban separation, the rural sector should be taxed, including agriculture income above certain threshold by averaging it over a period of three or five years. However, it was not clear if this would feature in the action agenda.
Giving a major go-ahead to the start-up sector, NITI Aayog has decided that any enterprise less than five years old and having less than Rs 25 crore in turnover may be permitted to declare itself a start-up with no subsidies in any form provided to the enterprise. This will ease the burden of compliance of a vast array of labour laws on the enterprise and pave the way for greater job creation.
The three-year action agenda also looks at addressing the high and rising share of non-performing assets in India’s banks through auction of larger assets to private asset reconstruction companies (ARCs) and also by strengthening the SBI-led ARC. Bad loans in India’s financial system had ballooned to over Rs 7 lakh crore at the end of December last year.
NITI Aayog has exuded confidence that India will get back to over 8% growth as it proposed a host of reforms, including reduction in corporate tax to 25% and uniform import duty at 7%. The action agenda will span a three-year time frame involving mostly executive decisions, the strategy will be for a seven-year period and include decisions that need legislative changes while the vision would be for fifteen years and incorporate institutional changes that may need Constitutional amendments.
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