Experts press for bold fiscal stimulus in labour-intensive sectors and establishing climate of trust

Experts and industry players argued that from a more short term perspective, the survey pegs the FY 2021 growth at 6-6.5 per cent which seems slightly on the higher side even though it clearly outlines the need for counter-cyclical fiscal policy in order to create additional fiscal headroom. Further, they pressed for proactive measures to push India amongst top 50 nations in the global pecking order of ease of doing business mechanism and make it globally competitive market.

The Associated Chambers of Commerce and Industry (Assocham) president Niranjan Hiranandani called upon the Centre to announce bolder policy and fiscal measures to recover from sharp economic downturn and somnolent market scenario. The success of economic green shoots lies in connecting the right dots for economic prosperity in an immediate time frame.

''We strongly recommend bold fiscal stimulus in the labour intensive sectors which shall have a domino effect to enhance employment generation and GDP ratio,'' said Hiranandani.

Also Read: Key highlights of Economic Survey 2019-20: GDP growth to range between 6 to 6.5% in FY21

PwC India, Leader Economic Advisory Services, Ranen Banerjee observed that attaining the projected growth rate of 6-6.5% will be challenging. ''The demand cycle is yet to pick up in India. Global growth including India is likely to be significantly impacted by the c oronavirus factor taking cues from history of impacts from the SARS outbreak. We can possibly infer a significantly higher government spending in the next fiscal from these projected growth numbers and will have to await the Budget announcements tomorrow for the same,” he viewed.

KPMG India Partner Elias George said that realizing economic growth targets and attaining national aspirations call for not just renewed focus and investment in key sectors like infrastructure and rural empowerment, but also on establishing and enabling a climate of trust. ''Consequently, the survey’s emphasis on strengthening India’s trust economy and on the creation of simpler and speedier contractual enforcement regimes are indeed most welcome,'' he noted.

He pointed out that the focus of the survey on further simplifying processes involved in setting up new businesses, as well as on facilitating business aspirations at a district level are in accordance with its overarching goal of equitable and universal wealth creation.

IMC Chamber of Commerce & Industry hoped that the slew of measures undertaken in the past years will show the GDP growth grow beyond the 6% expectation. ''We see the rate touching somewhere close to 6.5%. However, IMC expects that fiscal deficit target may be breached from current level of 3.3% to 3.8% to revive these growth trends in 2020-21.

Also Read: Coming year to pose challenges on fiscal front: Economic Survey