Vice President expresses confidence that the economy will rebound in the near future

The Vice President of India, Shri M Venkaiah Naidu today expressed confidence that the Indian economy would rebound in the near future saying that the current slowdown was cyclical.

Inaugurating the 102nd annual conference of the Indian Economic Association, he said it was true that the Indian economy was facing some challenges due to the decline in growth this fiscal. However, he said the country had faced similar slumps in the past in the wake of the East Asian financial crisis and global slowdown but bounced back with a higher growth rate every time.

Referring to the reforms initiated by the government including the introduction of the revolutionary GST to usher ‘ One Nation, One Tax, One Market’, the Insolvency and Bankruptcy Code and the steps taken to curb black money, Shri Naidu asserted that they were aimed at making the economy more robust and more resilient.

Pointing out that 66 lakh new taxpayers have been registered under the GST regime since its launch, the Vice President said that it indicated the rising trend of formalization of the economy. The Government has also taken measures to tackle the problem of NPAs and improve the health of the banking sector, he added.

Observing that agriculture was the mainstay of Indian economy, the Vice President cautioned that various waivers and subsidies would be unsustainable in the longer run. Stressing the need to diversify the rural economy, he said “rural non-farm activities are equally crucial for the growth of the rural economy”.

Stating that it was our national resolve to double the farmers’ income by 2022, Shri Naidu called for making rural economy sustainable and remunerative.

The Vice President also stressed the need for agricultural products to have access to larger markets, strengthening rural infrastructure, storage, and supply chains, apart from promoting village level in-situ food processing industry.

Referring to fiscal federalism as one of the themes of the conference, Shri Naidu said while most of the States have retained their fiscal deficit around permissible 3%, it has come at the cost of low capital expenditure. “There has been a rise in committed liabilities towards payment of interest and pensions, thereby leaving only a small part of their budget for capital expenditure on infrastructure development, he added.

The 102nd annual conference of the Indian Economic Association is being organised in Pt. RavishankarShukla University, Raipur.

Governor of Chhattisgarh, SushriAnusuiyaUikey, Chief Minister, ShriBhupeshBaghel, International Economic Association President, Prof. KaushikBasu, Indian Economic Association President, Prof.MahendraDev, Vice Chancellor of Pt. RavishnkarShukla University, Prof.KesariLalVerma and noted economists from across India and the world were present at the event.

Following is the full text of the speech –

प्यारे साथियो,

मुझे आज आपके बीच आकर बहुत खुशी हो रही है। आज Indian Economic Association के 102 वे वार्षिक सम्मेलन का उद्घाटन समारोह है और यहां बहुत से विद्वान, शोध करने वाले और उद्योग जगत के सम्मानित लोग मौजूद हैं। मैं आप सभी का सादर अभिभादन करता हूं।

जैसा कि सभी को ज्ञात है Indian Economic Association का उद्देश्य अर्थशास्त्र में अध्ययन, अध्यापन और शोध करना है। साथ ही आप लोग भारतीय अर्थव्यवस्था की समस्याओं और समाधान पर भी चिंतन और विमर्श करते हो।

I am pleased to be amongst this august gathering of scholars, researchers, business leaders and wealth creators to inaugurate the 102nd Annual conference of the Indian Economic Association being hosted by Pt. RavishankarShukla University, Raipur Chhattisgarh.

I am told that the main objective of Indian Economic Association is to promote the study, teaching and research in Economics and to study the problems of Indian economy.

It is expected of such independent research bodies to facilitate interface between Government, industry and wealth creators and other stakeholders to provide relevant broad-based policy inputs to the Government.

In ancient times, the Nagar Shresthi, the senior business man of the town, used be an integral part of royal court and used to provide counsel to the king. Kautiliya realised that wealth creation was essential for establishing a welfare state. He said that all programmes depended on treasury and advocated strategies for creation, protection and conservation of nation’s wealth.

Distinguished Friends,

As a Nation, we have taken a resolve to make our economy a US $ 5 Trillion economy by 2025, Double the income of Farmers by 2022, provide affordable Housing to all and connect every household with 24 hour power supply and piped drinking water by 2022, when we celebrate 75 years of our independence.

These are ambitious targets, but these services should have been delivered to our people in these 75 years since our independence. These targets will need resolute policy action, technology intervention and entrepreneurship and financial resources.

This conference is being organised in the backdrop of recent economic figures. There are media commentaries questioning India’s growth story. It is true that there are some challenges for the Indian economy as economic growth has declined in this fiscal year.

But it is not for the first time that India’s growth story has faced such sceptic comments. As renowned economist ShriAravindPanagarhiya has traced that ever since India’s reforms started in early 1990s, the country has faced slumps like in the wake of East Asian financial crisis towards the end of last century, or the global economic crisis towards the end of last decade.

Each time, we bounced back with higher growth rate.

Notwithstanding the GDP figures, India remains one the fastest growing bigger economies of the world. I must caution that a figure by itself may not always reveal the real story and strength of the economy unless it is placed in the context of recent policy initiatives, legislative architecture and institutional framework.

The reforms initiated by the government including introduction of the revolutionary GST to usher ‘ Óne Nation, One Tax, One Market’, the Insolvency and Bankruptcy Code as also the steps taken to curb black money are all aimed at making the economy more robust and more resilient.

The Government has also taken measures to tackle the problem of NPAs and improve the health of the banking sector.

I am told that 66 lakh new tax payers have been registered under new GST regime ever since its launch in July, 2017. This indicates the rising trend of formalisation of economy. The entire process of GST introduction and the decision-making mechanism in GST reflects the spirit of cooperative with every State and UT being represented on GST council.

Maintaining higher economic growth with fiscal prudence and monetary discipline requires resolute policy and legislative intervention. KaraurKarzkaanushasan arthvyavsthakeliyezaroorihai. Like in the previous times, this time also the global slowdown has affected us. It is being said that this slowdown of the Indian economy is cyclical. I am confident that things would look up and our economy would rebound in the near future.

As you all are aware, the government is working on the twin objectives of formalisation and modernisation of economy. The surge in the number of Income Tax and GST returns following the implementation of GST indicate the increasing formalisation of the economy. The process of formalization has been enabled by the use of technology in financial services, revenue administration and service delivery through Direct Benefit Transfer.

The need of the hour is to hasten the process of progress and ensure that every citizen is part of the growth story for an inclusive, forward-looking and prosperous India.

By creating conducive environment and adopting right policies and regulations, India is now making pioneering efforts to improve the infrastructure needed for development with a citizen-centric approach. This is quite visible from the fact that over the past few years, there has been huge growth in electronic citizen services delivery.

Dear friends,

India is digitally connected today. Undoubtedly, digitization is ensuring speedy delivery of services, apart from changing the banking and financial sectors. It is helping to achieve inclusive development.

The JAM trinity Jan dhan, AADHAAR and Mobile has enabled timely delivery of services, disbursal of benefits directly to the deserving and helped in plugging leakages.

As you all are aware, the twin processes of formalisation and modernization of the economy have made it transparent, inclusive and efficient.

  1. Insolvency and Bankruptcy Code has helped Banks to realise their loans. According to CRISIL during 2018-19, financial creditors could realise 42% of their Rs 2.53 Trillion amount involved in resolution. In percentage terms it is marked improvement over Pre-IBC era. As per one estimate the average time taken in resolution of insolvency cases has come down from more than 3 years to around one year. As a result of IBC and recapitalisation by the Government, many banks are now on the path of profit. Consolidation of Banks will further give them the benefits of economy of scales.

It must be realised that the dynamics of open economies will hit rough phases. It is a part of dynamic cyclical evolution. Corporate sector must accept temporary slow down as transient phase of an open economy so long as the economy is being run on transparent policy framework. I am happy that the Government has reacted to current situation to ease credit flow by recapitalising the Banks and persuading them to reach out to lend credit. It has asked the Departments and PSUs to release the outstanding dues of MSME suppliers to raise liquidity in economy.

I appreciate that the broad theme chosen for this conference will focus on “Economic Growth, Fiscal Federalism, Livelihoods and Environment”. Your discussions and deliberations will provide useful policy inputs to the Government.


हमें समाज की अंतिम पंक्ति के लोगों तक पहुंचना है।  उन्हें विकास की मुख्यधारा में शामिल करना है। उन तक विकास और सुशासन के फल पहुंचने चाहिए। जब लंबे समय से समाज के हाशिये पर रह रहे लोगों का सशक्तीकरण होगा, तभी हमारा भारत सही मायनों में एक खुशहाल भारत बन पायेगा।

समावेशी विकास की ये संकल्पना हमारे सभी कार्यों – कार्यक्रमों में दिखनी चाहिए। भारत सरकार ने ऐसे अनेक कार्यक्रम शुरू किये हैं जो सदियों से वंचित समूहों, महिलाओं और गरीबों के उत्थान पर विशेष ध्यान देते हैं।

आयुष्मान भारत के जरिये सभी भारतीयों तक मेडिकल सेवाएं पहुंचाई जा रही हैं और यह दुनिया के सबसे बड़े स्वास्थ्य कार्यक्रमों में से एक है।

स्वच्छ भारत मिशन के तहत 10 करोड़ से अधिक टायलेट बनायी गयी हैं और 6 लाख के करीब गांव खुले में शौच से मुक्त हुए हैं। इससे हमारी उन माताओं-बहनों को बहुत आराम मिला है जिनको पहले सूरज छिपने का इंतजार करना पड़ता था। आप उनकी परेशानी महसूस करके देखिये एक बार।

इसी तरह उज्ज्वला योजना है। इसके तहत अब 8 करोड़ से अधिक LPG कनेक्शन बांटे गये हैं।

Accomplishing a faster economic growth is indispensable to unleash the latent potential of Indian economy and to create more employment opportunities for realising demographic dividend and long-term poverty removal. Some of the pro-growth reform measures like opening up more sectors for foreign investments and the initiatives such as Skill India, Start Up India, ‘Make in India’ and Digital India are all meant to spur the growth of the economy.

Various administrative measures have helped India to consistently improve global ranking in the Ease of Doing Business over the past five years—India is ranked 63rd in 2019. But the benefits of Ease of Doing Business must reach to our MSME enterprises in smaller cities. Our young professionals and students should be able to realise their business ideas.

You will also be discussing the rural economy and development. Often rural development is considered largely in terms of agricultural development. Agriculture is the mainstay of our economy and is called the Primary sector as it provides the foundation over which financial superstructure is built. It is our national resolve to double the farmers’ income by 2022.

Even as agriculture remains an important activity, rural non-farm activities are equally crucial for the growth of the rural economy. We must realise that various waivers and subsidies will be unsustainable in the longer run. We must diversify the rural economy.

While mechanisation and agro-research can enhance agricultural productivity, we must think to make rural economy sustainable and remunerative. Agricultural products must have access to larger markets. Apart from fully tapping digital tools like E- NAM, we need to strengthen rural infrastructure, storage and supply chains and also promote village level in-situ food processing industry. I am happy that the Government has decided to spend Rs 25 lakh crores on rural sector over next five years. I am sure that this investment will not only strengthen rural infrastructure but will also create demand in rural economy.

Fiscal federalism is the third theme of this conference. This is an important aspect of country’s financial administration. I am pleased to note that majority of States have been able to maintain the State GDP growth rate at the level of National Growth rate or even higher. While most of the States have retained their fiscal deficit around permissible 3%, it has come at the cost of low capital expenditure. There has been rise in committed liabilities towards payment of interest and pensions, thereby leaving only a small part of their budget for capital expenditure on infrastructure development. This Conference must discuss this issue and come up with solutions.

This Conference will also be discussing the issues pertaining Livelihood. Ensuring productive livelihoods and employment generation is one of the main objectives of development. It makes growth inclusive and equitable. India is a young country with 65% of population under 35 years of age. India’s demographic dividend is an opportunity and a challenge.

It is therefore necessary that we promote skill training and entrepreneurship among our young population. Our young students and professionals must not remain job seekers but rather become job providers. It was with this objective that the schemes like MUDRA were launched, which has so far disbursed Rs 1.5 lakh crores to 3.14 crore small and emerging entrepreneurs in 2019-20.

Today, India has emerged third in the number of Start ups. The country has unleashed the entrepreneurial spirit of our techno-professionals. We have set a target of 1 lakh Start Ups with 100 Unicorns each having a valuation of US $ 1 Billion, by 2025. Our Start Ups are venturing into newer domains like electric vehicles, bio-tech, agri-tech, retail tech, space and robotics. We must provide them skill infrastructure to prepare them for 4th industrial revolution. This process should start right from the school level where Atal Tinkering Labs have been set up to capture the imagination of young minds.

Angel investors from world over are reposing faith in Indian Start Ups. As per one estimate in the first half of the current year, around US $ 4 Billion were invested in around 300 domestic Start Ups. This is the promise our youngsters hold in global investment market.


Distinguished Delegate Friends,

I am happy that you will also be discussing environment issues in the context of overall economic development strategy. The beautiful State of Chhatisgarh has rich mineral deposits with huge potential for industrial development. A sizable population is traditionally dependent of Forests and we need to strike a fine balance between environment and development. Unsustainable production and consumption might result in an irreversible damage to our ecosystem.

This State is home for three Maharatna PSUs namely NTPC, Coal India and SAIL and one NavRatna PSU NMDC. These PSUs have provided the basis for rapid industrialization of the State, which was created by Atalji in year 2000, considering the special developmental requirements of local population.

A sizable part of this State has lagged behind due to naxal violence. While native communities have rightful claim over resources, they also require development and facilities. It must also be realised that peace is the pre-requisite for development. I believe that you will discuss this vital aspect during the Conference.

I hope that the discussions and deliberations of the three-day conference will provide valuable policy inputs. I thank you for giving me opportunity to share my impressions with such an august gathering.

Thank you!

Jai Hind!”