‘Private sector should unleash animal spirits to push economy’

Sanjeev Sanyal, Principal Economic Advisor to the Ministry of Finance, on Tuesday said that the private sector should unleash their animal spirits to push the country’s economy into a higher growth trajectory. While there is a need to have public sector companies in certain sectors, there are several sectors where private companies can do a better job, he said.

“The government will provide the background support in the form of infrastructure and simple regulations,” Sanyal said at an exclusive e-session organised by Bharat Chamber of Commerce here on Tuesday.

‘Deregulation is needed’

Emphasising on the need for minimum government and maximum governance, he said, the government has been taking several initiatives to simplify regulations. “We are systematically shutting down departments or organisations (which are redundant) and more will be shut down in the future,” he said.

The government, he said, has been focusing on improving the overall ease of doing business in India. “There are a large number of absurd regulations in India and in the last few months we have been removing some of those. This will be our next major area of focus,” he said.

The emphasis of Budget 2021 has been on infrastructural development and this is expected to spur growth and employment generation rather than artificially inflating the economy though fiscal incentives. India would follow an investment led growth model which would be supported by huge FDI inflows from interested foreign investors, he said.

Speaking on the GDP growth rate of 14.5 per cent in 2021–22 as announced in the Budget, he said that the growth forecast is at a nominal rate that includes 10 percent real GDP growth and 4 per cent inflation, while the IMF has projected a stronger GDP growth for the Indian economy at 16 per cent in 2021-22.

Though growth in a couple of sectors like travel, tourism and hospitality is still restrained and some States are facing the second wave of Covid-19, he said. “However, it is expected that India is set to emerge as the fastest reviving economy in the world post the Covid-19 pandemic,” he added.