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Industry chambers on Friday said the Economic Survey reaffirms the need for pursuing a counter-cyclical fiscal policy to boost economic growth with expectations of the economy, that has been hard-hit by the pandemic, to bounce back as the worst seems to be behind us.
Chandrajit Banerjee, Director General of CII, said the Survey strikes an optimistic note on the economy bouncing back to a resilient V-shaped recovery adding that the availability of the vaccine and robust service sector recovery “would further buttress the growth momentum.”
Click here to read the full survey
“Acknowledging that pursuing counter-cyclical fiscal policy boosts growth during economic downturns, the Survey findings are in concurrence with CII’s recommendation on having a higher deficit print, albeit within reasonable limits. This will result in faster growth and smaller deficits in the future,” he added. Banerjee also said that survey corroborates the need for greater attention to the healthcare infrastructure.
“Based on the analysis, the survey has delineated pragmatic policy suggestions for meeting the social and economic goal posts envisioned for the country,” he added.
Meanwhile, Uday Shankar, President of FICCI, said that several key points made in the Survey are in tune with the current requirements of the economy and a reflection of these is expected to be seen in the upcoming Union Budget.
“To bring the improving growth trajectory on a firm footing and extend it to many more sectors, continuous support from the government is needed through the year 2021. We need a Keynesian type of demand stimulation and the Budget must inject a heavy dose of fiscal stimulus to prop up both consumption and investment. FICCI has been strongly advocating the need to prioritise growth over fiscal considerations and the Economic Survey reiterates the point on having a counter-cyclical fiscal policy,” Shankar added.
“As the government expands its balance sheet, there will be a need to augment revenues. There are several avenues that can be looked at including strategic sale and privatisation of public sector enterprises. Indications are that the government is actively looking at this route and we would see some major announcements in the Budget,” he added.
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