At PM meet, experts flag: Private investment, reforms, FDI outflow

PRESSING ahead with the reform process by extending it to land and agriculture; rationalisation of subsidies; trade diversification; incentives for private investment, philanthropy, research and development; along with a focus on capex and fiscal consolidation — these were some of the key suggestions made by top economists in their meeting with Prime Minister Narendra Modi at the Niti Aayog Tuesday. Technology was also in focus, with many economists suggesting setting up centres of excellence for Artificial Intelligence (AI) along with the need to take measures such as grants to support the return of Indian talent, sources said.

The PM stressed on “mission-mode reforms to build global capability and attain global integration”, calling for reforms across sectors to sustain long-term growth. He stressed that India’s policymaking and budgeting must remain anchored in the vision for 2047, an official statement said.

With the Union Budget 2026-27 a month away, the meeting, which was on the theme ‘Aatmanirbharta and Structural Transformation: Agenda for Viksit Bharat@2047’ also saw suggestions being made to incentivise households to save more and protect them from mis-selling of insurance products.

On the tax front, some experts called for clearer rules for easier interpretation. A suggestion was also made to give uniform tax treatment to debt and equity investment instruments.

The economists shared “strategic insights on enhancing productivity and competitiveness across the manufacturing and services sectors”, the government statement noted. “The discussions focused on accelerating structural transformation through increased household savings, robust infrastructure development, and the adoption of cutting-edge technology. The group explored the role of AI as an enabler of cross-sectoral productivity and also discussed the continued scaling of India’s Digital Public Infrastructure,” it said.

Amid the pressure from high US tariffs, some economists are learnt to have suggested incentives for exporters and manufacturers for trade diversification. Ideas to boost private investment were also shared, with some suggesting a “carrot and stick” policy, with polluting industries being taxed and incentives for those who scale up investments.

Concerns over foreign investment outflows also surfaced at the meeting, with some pointing towards the need to stabilise them. India registered a net Foreign Direct Investment (FDI) outflow for the second month in a row in October. Net FDI outflow was $1.55 billion in October primarily due to foreign investors repatriating their funds and Indian companies investing abroad after the exit of $1.66 billion in September.

Government finances were also discussed with suggestions ranging from rationalisation of subsidies and fewer freebies to maintaining the pace of capital expenditure and keeping an eye on fiscal consolidation.

Some participants favoured a gradual reduction in government capex, while some said states must be more disciplined in their spending. Inputs were also provided to increase public spending on education and vocational training.

The meeting saw participation from 20 economists and experts, including Shankar Acharya, NR Bhanumurthy, Janmejaya Sinha, Dinesh Kanabar, and Ashima Goyal, among others. Finance Minister Nirmala Sitharaman was also present at the meeting, along with PK Mishra and Shaktikanta Das, Principal Secretaries to the PM. Other senior government officials included Niti Aayog Vice Chairman Suman Bery and Chief Economic Advisor V Anantha Nageswaran. Each member was given about 3-4 minutes to put forth their suggestions for the Budget.

Separately, the PM said that “India has boarded the Reform Express”. In a post on LinkedIn, PM cited the examples of GST rationalisation, income tax cuts, nod for 100% FDI in insurance, Securities Markets Code, revocation of 22 Quality Control Orders (QCOs), notification of four labour codes, nuclear energy-linked SHANTI Act, unified education regulator, and Viksit Bharat- G RAM G Act, 2025 Rozgar Guarantee framework as the key reforms undertaken by the government in 2025.

“These reforms were designed with empathy, recognising the realities of small businesses, young professionals, farmers, workers and the middle class. They were shaped by consultation, guided by data and anchored in India’s constitutional values. They add momentum to our decade-long efforts to move away from a control-based economy to one that operates within a framework of trust, keeping the citizen at its core,” Modi said.