New Delhi, March 17 A parliamentary panel on Tuesday suggested that the Department of Economic Affairs should develop a strategic energy mitigation framework to protect the economy from oil shocks and ensure long-term stability.
In addition, the Standing Committee on Finance, in its report, emphasised that the rapidly evolving global competition for critical minerals and rare earth elements, which are essential for semiconductors, renewable energy systems, electric mobility, defence technologies, and the development of alternative fuels, requires a coordinated national strategy.
The panel, headed by senior BJP leader Bhartruhari Mahtab, has, therefore, recommended that the government accelerate efforts to secure diversified international supply chains for critical minerals, such as lithium, cobalt, and rare earth elements, while simultaneously strengthening domestic exploration, processing, and value-addition capabilities to support emerging sectors, including renewable energy, electric mobility, and alternative fuel technologies.
Regarding investment, the panel has recommended that the Department of Economic Affairs (DEA) under the Finance Ministry must streamline the FDI regulatory framework to counter the global downward trend and ensure India remains a preferred destination for long-term institutional capital.
The framework should incorporate sector-specific incentives, including single-window approvals, fast-track clearances for high-value manufacturing and frontier technology projects, and targeted R&D linked fiscal benefits, to attract and retain institutional investors despite global volatility, the panel said in a report.
Most critically, the committee have recommended that the department facilitate a 'Structural Reform Bridge' to help states transition away from revenue deficit grants (RDGs).
This must include a rigorous mechanism to discourage fiscal populism by linking 'Special Assistance for Capital Investment' to the successful rationalisation of revenue expenditure, the report said.
By enforcing strict adherence to Off-Budget Borrowings (OBBs) reporting and promoting fiscal prudence, the government can ensure that the transition to a post-RDG era strengthens the internal economic fabric of the nation, it added.
The panel also recommended the establishment of a more formalised 'Sinking Fund' to manage the redemption of long-term bonds systematically.
The committee further recommend that the DEA maintain high levels of transparency regarding 'Off-Budget' liabilities to ensure the market has an accurate view of the total repayment obligations, thereby maintaining the stability of the sovereign credit rating.
To address the challenges of the "digital dropout" trend in secondary education, state financing in VB-GRAM G (Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), vulnerability of small farmers vulnerable to market volatility, the committee have recommended that the DEA move beyond legislative consolidation toward measurable, outcome-oriented implementation of the Care Economy and social security frameworks.
This includes ensuring that the mandatory 1-2 per cent aggregator contribution to the Social Security Fund is effectively operationalised to provide portable benefits that actually reach the informal workforce, the report pointed out.
In education, the report said, the department must ensure that AI modules do not supersede the foundational strengthening of secondary school infrastructure, particularly broadband connectivity under Bharat Net.
For rural and agricultural resilience, the committee have urged the government to incentivise the Farmer Producer Organisation (FPO) model more aggressively to counter land fragmentation and to conduct a formal fiscal impact assessment of GST (Goods and Services Tax) Reforms 2.0, it said.
Such an assessment is vital to determine if the transition to a simplified two-rate structure and the rate cuts on essential goods are effectively stimulating household consumption and supporting MSMEs without creating unsustainable fiscal gaps at the state level, it added.