Survey notes Govt’s clear resolve to address issues

FICCI’s latest Economic Outlook Survey indicates a GDP growth is expected to improve to 6.2% in Q2 of 2017-18 and further to 6.7% in Q3 of 2017-18.

The slowdown in the economy due to demonetisation and the adjustment impact of GST implementation seems to be bottoming out and as the new indirect tax regime stabilizes, the economy would see an improvement in its performance.

This view was expressed by the economists who participated in the latest economic outlook survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI).

The steps taken by the government to reduce the compliance burden related to GST and make its implementation smoother, the comprehensive plan announced for recapitalisation of the banks and the thrust laid on the infrastructure sector have been acknowledged by the survey participants as an indication of government’s clear resolve to address the key issues that are hobbling growth.

Even as these steps are taken by the government, the economists emphasised that reviving consumption particularly in the rural and semi-urban areas will be important to give a boost to overall demand in the economy. With the supply chains being impacted more in these areas compared to the urban areas, greater attention here was called for.

In this context it was emphasised that projects such as ‘housing for all’ and ‘electricity for all’ should be expedited as these would improve employment prospects in the rural areas and thereby help improve demand. Strengthening of the agri-supply chains and diversification in the rural areas in terms of the economic activities pursued were also mentioned as steps to improve performance of the economy.

The participating economists also mentioned that government should continue with its emphasis on productive capital investments in the social and physical infrastructure space, even if this requires some calibration of the fiscal deficit target. fii-news.com