Right policy levers needed to crank up 8% growth: India Inc

India Inc believes that with the right policy levers, the country does have the ability to sustain an average growth rate of 8 per cent over the next five years, which is the desired target set by the Survey.

Calling the 7 per cent growth pegged by the Survey for 2019-20 as a “pragmatic target”, Chandrajit Banerjee, Director General, Confederation of Indian Industry, said: “Concerted effort is required to drive an improvement in private investment along with robust consumption to lift the growth in the current fiscal from a multi-year low of 6.8 per cent posted in 2018-19. However, the headwinds to growth as underlined by the Survey in the form of weaker exports and stress in the shadow-banking system are the main areas of concern.”

He added that for sustaining the growth at an 8 per cent rate, investments would be the key driver, “heralding simultaneous growth in demand, jobs, exports and productivity.”

“Economic policy uncertainty has been underlined by the Survey as one of the key factors impinging on the investment potential of the economy, as it increases the systemic risk, and thereby the cost of capital. An index must be created to track economic policy uncertainty and (it must be) monitored at the highest level on a quarterly basis,” Banerjee said.

Meanwhile, Assocham President BK Goenka said that the positives in the Survey give hope that the industry would ride out some of the challenges such as the liquidity crisis being faced by the NBFCs and its impact on consumption. This will require bold moves by the government and the RBI. “Focus on direct transfers to farmers and greater attention to agriculture infrastructure would raise the rural income and demand, giving a boost to growth. However, monsoon would be a key factor to watch,” Goenka added.

Sandip Somany, President, FICCI said: “ Strengthening the investment cycle has to be the topmost priority, and we hope that the Union Budget will provide specific measures to boost the investment, consumption and savings rate in the economy. The deceleration in these three key parameters over the last few years has been the reason behind growth moderation.”

Meanwhile, the Confederation of All India Traders, in a statement said that the Survey is an “indication that the focus of the government is now on boosting growth and development of the MSME sector.”

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