Govt must unleash bold reforms to achieve 6-6.5% growth in FY21, say experts, industry
New Delhi: Attaining a GDP growth rate of 6 to 6.5 per cent in 2020-21 as projected by the Economic Survey will be "challenging" and the government needs to prioritise growth while unleashing bolder policy measures to achieve it, experts and industry bodies said on Friday.
India's economic growth is expected to "strongly rebound" to 6-6.5 per cent in 2020-21 from 5 per cent estimated in the current fiscal, said the Economic Survey 2019-20 tabled in Parliament on Friday by Finance Minister Nirmala Sitharaman, adding that the government with a strong mandate has the capacity to expedite reforms.
"The 6-6.5 per cent growth pegged by the Economic Survey for 2020-21, is a target that is achievable with the right dose of reforms and public investments," CII Director General Chandrajit Banerjee said.
The chamber said as the Economic Survey is a precursor to the Union Budget, it expects some of the bold reforms highlighting trust, entrepreneurship and primacy of the market to be reflected in the Budget announcements.
Leader Economic Advisory Services at PwC India Ranen Banerjee said attaining the projected growth rate of 6-6.5 per cent will be challenging.
"The demand cycle is yet to pick up in India. Global growth including India is likely to be significantly impacted by the corona virus factor taking cues from history of impacts from the SARS outbreak," he noted.
Economist at Deloitte India Rumki Majumdar said the Survey projects growth revival in FY 2021 but suggests that the government may have to incur expansionary policy to support growth.
"As has been argued earlier, the government has to prioritise growth. Once the momentum picks up, the government can take action to consolidate its expenses," Majumdar observed.
Tech Mahindra MD & CEO CP Gurnani said India needs to be persistent with the technology push through initiatives like 5G rollout that will enable the use of big data, artificial intelligence and machine learning to give necessary impetus to the digital economy and other growth areas that encompass sustainable development. Assocham President Niranjan Hiranandani said it strongly advocates that the Central government needs to announce bolder policy and fiscal measures to recover from "sharp economic downturn and somnolent market scenario".
"The prognosis undertaken in the Economic Survey released today highlights the ground reality and gives insights into what the economy has achieved over the last one year. The growth is estimated to pick up to 6.0-6.5 per cent in the fiscal year (2020-21) on back of expeditious implementation of reforms," Ficci President Sangita Reddy said.
Going ahead, we look forward to a pragmatic Budget which focuses on enhancing consumption demand and investments to refuel economic growth trajectory, PHDCCI President D K Aggarwal said.
"Realizing economic growth targets and attaining national aspirations call for not just renewed focus and investment in key sectors like infrastructure and rural empowerment, but also on establishing and enabling a climate of trust," said Elias George, Partner and National Head - Infrastructure, Government and Healthcare, KPMG in India.
"Considering the difficulties in proposing and implementing the budget 2020 at this juncture budgetary policy has to create more trusting and rewarding environment for investors, keeping revenues stable and boosting demand through public investment and spending," said Raktim Chattopadhyay, Founder & CEO, Esperer Bioresearch.