The panel has four other members -- Home Minister Amit Shah, Highways and MSME Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Commerce & Railways Minister Piyush Goyal.
The meeting came against the backdrop of GDP growth slowing to a six-year low of 4.5 per cent in the July-September quarter as the twin engines of investment and exports sputtered. Adding to the woes is a slowdown in consumption.
This was the sixth consecutive quarter when the growth rate fell.
Alongside CCIG, a Cabinet Committee on Employment & Skill Development headed by Modi was also constituted in June. It has 10 members and, apart from Shah, Sitharaman and Goyal, they include Agriculture Minister Narendra Singh Tomar, Petroleum Minister Dharmendra Pradhan, Skill Development Minister Mahendra Nath Pandey, Labour Minister Santosh Kumar Gangwar, Housing and Urban Development Minister Hardeep Singh Puri and HRD minister Ramesh Pokhriyal.
The Cabinet committees were in response to growth slowing down and a rise in unemployment. The Periodic Labour Force Survey of the National Sample Survey Office had shown that the unemployment rate in the country was 5.3% in rural India and 7.8% in urban India, resulting in an overall unemployment rate of 6.1% during 2017-18.
In response to economic growth decelerating since mid-2018, the government has announced fiscal measures including a cut in the corporate tax rate, bank recapitalisation, infrastructure spending plans, support for the auto sector and others. But some experts believe these do not directly address widespread weakness in consumption demand, which has been the chief driver of the economy.
In addition, interest rate cuts by the Reserve Bank of India are not being adequately transmitted to lending rates because of the credit squeeze caused by a disruption in the non-bank financial sector.
Last week, Fitch Ratings cut its growth forecast for India to 4.6 per cent for 2019-20 fiscal on significant deceleration in the past few quarters due to credit squeeze and deterioration in business and consumer confidence. Moody's has put 2019-20 growth at 4.9 per cent and the Asian Development Bank (ADB) estimates it at 5.1 per cent.
The meeting comes at a time when the government is busy preparing the second budget of Modi-2.0 regime. Sitharaman is to present her second budget on February 1.
The government has indicated that its corporate tax rate cut could lower revenue by 0.7 per cent of GDP in FY2019-20 and hopes to finance spending by more aggressive asset divestments, including Air India and Bharat Petroleum Corporation Ltd (BPCL).
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