With an aim to push India’s economic growth at a rapid pace, government think tank Niti Aayog has made a strong case for boosting investments and savings. The Aayog has stressed on sustaining macro-economic stability in its appraisal of the Twelfth Five Year Plan (2012-17). The document noted that lower savings and investment rates are still a major cause of worry. Therefore, it pointed out that the strong and dedicated efforts in terms of appropriate policy interventions in a time-bound manner are needed in order to boost savings and investment in the economy.
The document has further clarified that the policy interventions should be focus on the key drivers of progress such as boosting investment, skill formation and creating the appropriate environment. Asserting that a stable and predictable tax regime is a precondition for sustained high levels of Investment, hence it said that prime importance should be given to boosting investors’ sentiments positively so as to reap the benefits of high foreign investment of a long-term and stable nature. Admitting that Inflation management is another essential area to accelerate growth, the document said a greater focus should be placed on management of price levels.
It also mentioned that there should be effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. On the Goods and Services Tax (GST) front, the document noted that the move will help in increased compliance, boost tax revenues, reduce the tax outflow in the hands of the consumers and make exports competitive. It also said that the implementation of new tax regime is likely to push India's gross domestic product (GDP) by 1-2 percent.