A parliamentary panel on Tuesday pitched for raising the investment rate from 31 per cent of GDP to 35 per cent in order to achieve the ambitious growth target of 8 per cent.
The Standing Committee on Finance urged the government to maintain sustainable, growth-oriented energy policies that prioritise affordability and efficiency, while balancing climate commitments with economic and social objectives.
The committee, headed by BJP leader Bhartruhari Mahtab, also suggested that the Ministry/Central Electricity Authority (CEA) expedite the development of pumped storage projects (PSPs), recognising their critical role in strengthening energy security and reducing import dependency.
The panel noted that the investment rate must rise to about 35 per cent of gross domestic product (GDP) from the current 31 per cent to achieve the target of 8 per cent annual growth for at least a decade.
“Financing this may result in higher levels of current account deficit (CAD), which is challenging under current global circumstances. This emphasises the need for domestic-led growth, for which deregulation is crucial,” it said in its report.
The committee highlighted the collaborative approach through the deregulation task force chaired by the cabinet secretary. It said this model of cooperative federalism — facilitating dialogue with states on best practices in land, labour, capital, and regulatory reforms — can streamline business processes and create a more investor-friendly environment.
It further noted that tailored fiscal reforms may be promoted in highly indebted states to improve their fiscal health, while maintaining their capacity to invest in infrastructure and social development.
Turning to agriculture, the panel underscored the vast untapped potential of India’s farm sector as a key driver of inclusive growth. It said a dual approach was required: addressing immediate challenges while implementing long-term structural reforms.
For short-term stability, it is observed that the government’s strategy of maintaining buffer stocks, regulating market supplies, and subsidising key food items helps stabilise prices and ensure affordable access to essentials.
To boost productivity and financial inclusion, the committee recommended accelerating digital initiatives such as digitising land records and implementing the agri-stack, a technological framework linking farmers’ produce with banking and credit systems. The report said this would facilitate transparent and timely disbursement of crop loans.
The panel urged that these digital tools be expanded nationwide, with local youth trained to assist in data collection, thereby creating employment opportunities and improving data accuracy.
It also called for promoting diversified crop production, strengthening supply chain infrastructure, and encouraging private sector participation in agri-tech innovation.
Such measures, the panel said, can mitigate supply-side inflation, raise farmers’ incomes sustainably, and transform agriculture into a powerful engine of growth.
Noting that the current global trade environment, marked by protectionism and geopolitical volatility, presents an opportunity for India, the committee said this could be leveraged to pursue the principle of “Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayas” and build an Atmanirbhar Bharat.
It stressed the need for sound government finances, with greater focus on the quality of expenditure, particularly capital expenditure, while also recognising the growing role of artificial intelligence (AI) and data in governance.
The committee said that despite positive corporate earnings, investment in people — through higher wages, reskilling, and mental health support — is vital for higher productivity.
It concluded that India’s economic roadmap must aim not only for a short-term USD 5 trillion economy, but also for sustained, inclusive, and resilient long-term growth.
To achieve this, it recommended a multi-pronged approach, including strengthening government finances and nurturing growth engines such as innovation and skills development.
The panel further recommended setting up an indigenous, government-owned AI server to address privacy concerns, enhance efficiency, and harness data for policymaking.
It also emphasised the importance of prioritising rural and urban infrastructure, as well as investing in people. A strategy built on balanced energy policies, price stability, and strong support for MSMEs and women entrepreneurs should, the panel said, drive inclusive and sustainable growth for a self-reliant India.
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