While India can take a legitimate sense of pride in being the haven of stability in an otherwise gloomy global economy, the Economic Survey has rightly highlighted the need for being prepared to face any spill-over of major currency adjustments in China and other Asian economies. Besides, a vigil needs to be kept on the capital outflows from the emerging economies, as underlined by the Survey, ASSOCHAM President Mr Sunil Kanoria said.
Mr Kanoria said it is always prudent to follow a fiscal discipline and stick to the fiscal deficit of 3.9 per cent this year and lower in 2016-17, but what matters is the quality of government expenditure which can revive investment in the key infrastructure. The liberal pay revisions suggested by the 7th Pay Commission need to be toned down.
Agrarian crisis due to successive failure of monsoon for two years has been flagged off in the Survey, conveying a signal about growing realization in the government about the farm sector. In this backdrop, the Union Budget is expected to give a major focus on the farm and rural economy, which would be the right thing to do. Any help to the agri sector, is taken as the help for the industry, we are very clear in ASSOCHAM about it.
The worries on the increasing non-performing assets in the banks are only growing, thus underscoring the need for an increased level of recapitalization by the government in the PSU banks. At the same time, the RBI should also be coming forward to be addressing any concerns which may arise even among the private sector banks which have also extended large loans to weaker sectors like realty, highways, steel and power.
If at all it is a pointer, the Economic Survey has mapped the challenges and the headwinds before the Indian economy which has to only increase its vigil against rising risks emanating from the external world. However, much of them can be handled and tackled with bold reforms like Goods and Services Tax, assuming that the polity rises to the occasion, Mr Kanoria added.