Commenting on the Economic Survey 2015-16 presented in the Parliament, Sumit Mazumder, President, CII said that the Survey projects a positive outlook for the economy in the coming year with growth rate poised to be in the vicinity of 7-7.75% for 2016-17 despite global headwinds. CII commends the Survey for taking a pragmatic approach and bringing out a realistic growth number for FY17 which is eminently achievable especially as inflation is benign and current account deficit is within range. The medium term growth trajectory is also credible and convincing.
While agreeing with the prognosis made in the Survey, Mr Mazumder said, “At a time when the global economy is facing significant headwinds, India’s macro-economic performance offers a welcome contrast. CII hopes that the government would carry forward the reforms agenda as outlined in the Survey especially at a time when India is being counted as one of the world’s primary growth engines.”
CII agrees that adherence to the precept of fiscal rectitude has been an outstanding achievement of the Government. Mr Mazumder added, “It is heartening to note that according to the Survey the fiscal deficit target of 3.9% during the current fiscal is achievable. The Survey rightly suggests that the fundamental task of the Budget is to conserve fiscal sustainability.”
Mr Mazumder stressed that for expenditure control, more subsidies can be rolled out through the JAM trinity which has made commendable progress over the past year. CII hopes that we shall see GST getting implemented in the course of the year, he stated.
According to the CII press release, the key takeaway from the Survey is its push for accelerating public investment, particularly in the infrastructure sector as a sure shot means to revitalise growth. “With private investors weighed down by debt overhang and stretched balance sheets, public spending can ‘crowd in’ private investment,” said the CII President. Budgetary allocation for capital expenditure should be increased and surplus funds of PSUs should be deployed for capacity expansion. CII agrees with the 4R solution – Recognition, recapitalization, resolution and reform- enunciated in the Survey to tackle the problem of stressed bank assets, he maintained.
A pro-competition approach to business and implementation of Bankruptcy Code would also be a vital factor propelling growth, according to CII.
The Survey has rightly recognized that greater attention should be paid to invigorating the agriculture sector to provide a boost to rural demand. Similarly, a call for major investments in education and health is timely to reap the demographic dividend and promote inclusive growth.
According to CII, industry looks forward to a pragmatic, reform-oriented and bold Budget which would facilitate a comprehensive economic revival.