Challenges and opportunities

#The Economic Survey 2016-17, tabled in the Parliament 31 January 2017, clearly lays out the challenges and opportunities faced by India, said #Pankaj Patel, President of the #Federation of Indian Chambers of Commerce and Industry (FICCI).

“The survey clearly lays out the challenges and opportunities that India faces at the present juncture.

“FICCI agrees with the need to overcome the three ‘meta challenges’ as identified in the survey namely inefficient redistribution, ambivalence about the private sector and property rights and the improving but still challenged state capacity,” he said in reaction to the survey.

“A clear plan of action with sustained reforms in each of these areas by the government is a must to attain sustained high and inclusive growth.

“The growth projected for the current year is lower by quarter to half a percentage point compared to the baseline of 7 per cent.

The downward pressure is on account of demonetisation, but the survey adds that the contractionary effects will dissipate by the end of the year and we could see a better performance in FY18.

“Even with this performance, India will continue to be the fastest growing major economy in the world”, Patel elaborted.

“As pointed out by the Economic Survey and emphasised by FICCI, in order to reap the long-term benefits of demonetisation there is a need to have follow up actions such as providing a boost to demand, lowering of tax rates, widening of the tax base and reforming the tax
Administration,” he said.

FICCI hopes that the Union Budget to be presented 1 February 2017 will include measures in these areas.

“Taking account of the current global and domestic economic situation, the Economic Survey stresses the importance to re-establish private investment and exports as the major drivers of growth,” noted Patel.

FICCI’s most recent Business Confidence Survey and Economic Outlook Survey clearly point in this direction and we will be looking for signals in the budget to give a boost to these areas, commented Patel.

FICCI welcomed the Survey’s idea of having a centralised public sector asset rehabilitation agency (PARA) to the twin balance sheet problem.

It is closely related to FICCI earlier submission to have a National Asset Management Company (NAMCO) to address the issue of large and complex stressed assets particularly in the infrastructure sector.

Such an institution should be professionally managed, majority funded by the private sector with institutional backing of the government, he pointed out.

“Finally, as the Survey mentions, we are witnessing a new economic order globally with shift once again leaning towards protectionism following the BREXIT and America First policy of the new administration in the United States,” said Patel.

“FICCI is of the view that in this backdrop there is a need to set up an industry – government taskforce to address the current developments and their consequences for Indian industry and business”, said Patel. fii-news.com