NITI meeting called by PM Narendra Modi to review economy amidst currency crunch

Prime Minister Narendra Modi has called a high-level meeting at NITI Aayog on Tuesday to take stock of the economy and other important issues particularly the currency crunch post demonetisation. Modi has called the meeting to seek feedback of NITI Aayog members, economists and top officials of various concerned ministries particularly Finance and Commerce & Industries, a highly placed source in the Prime Minister’s office said.

The source said that the government is keen to chalk out a strategy to deal with adverse impact of currency crunch on the economy particularly on unorganised sector where people lost jobs because of currency crunch prevailing since November 8, 2016. The meeting assumes significance in view of various multilateral agencies and RBI lowering growth forecast for the current fiscal.

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RBI has reduced the economic growth forecast to 7.1 per cent from 7.6 per cent in its monetary policy review earlier this month. Multilateral funding agency ADB too lowered growth projection to 7 per cent for the current fiscal from its earlier projection of 7.4 per cent due to the impact of demonetisation on economic activities.

Indian economy expanded by 7.1 per cent and 7.3 per cent in the first and second quarters of 2016-17. The economists including former Planning Commission Deputy Chairman Montek Singh Ahluwalia has expressed opinions that the demonetisation will disrupt the economy and will pull down the GDP growth rate for the current fiscal by up to two percentage points.

The source said that Prime Minister will also take stock of various initiatives of the NITI Aayog to promote the digital economy like Lucky Grahak Yojana and Digi-Dhan Vyapar Yojana for incentivising digital payment.The estimated expenditure on the first phase of the scheme (up to April 14, 2017) is likely to be 340 crores.