Overall investment has slowed, says Dr Reddy
The government has been called on to find ways to infuse at least Rs.1-2 lakh crore into the economy to boost construction and infrastructure developments and to clear up the back log of pending payments despite the concern about fiscal deficit.
Making the call, FICCI’s newly appointed President Dr Sangita Reddy said the Government needs to put stimulus in terms of financial, and underlined the need for structural reforms as well as need to boost sentiment and consumption to re-accelerate the economy.
“Looking at the economy, 24 months ago, we were looking at a very different prospects in terms of our trajectory. We were to be the shining star on the global map.
“But in the past 24 months, we have been through ups and downs,” she said with a concern.
Every corporate and every Indian faces a combination of slowdown in consumption, which is at the core of a lot of problems, arising from an overall lack of growth prospects or loss of jobs, and a certain amount of uncertainty. Besides, the invest climate looking weak, Dr Reddy elaborated.
There is an overall slowness in terms of investment, she noted.
Though the FDI looks good due to multinational companies bringing investment into their back offices in India by which they are tapping the Indian brain power to fuel global companies’ growth. Yet this has minimal impact on the Indian economy.
On positive aspect, the banking sector has emerged stronger as the number of NPAs is down, the GST consolidation is a positive step and the technology adoption is enhancing productivity. Therefore, the overall sector should be stronger, but the road to travel is much more far, Dr Reddy pointed out.
“At FICCI, we need to talk about the entire aspect of structural reforms,” she said.
A recent FICCI report estimated that there are 8,000 different clearances, permissions, license, processes, which have to be done for a single manufacturing company to open, she pointed out.
Also, of late, the senior leadership in companies spend 3 to 5 hours in board meetings with lawyers, audit and compliance, rather than focusing on growth and innovation, which they should be doing, Dr Reddy observed.
So, this combination of aspects is slowing down the economy. “On the other hand, I believe it’s a great opportunity to bounce back and 2020 could be the year we find a way to do that.”
She further underlined the need for major reforms in Agri sector and significant boost is needed in the exports. In fact, India’s share is just 1.7% in terms of exports, which presents a huge opportunity to improve.
“I think, together we can and together we should, because just not to our potential as a country but also to our future generations, because having reached this momentum in India’s history of both economic and developmental, it wouldn’t be the right time to slow down, let’s find a way to change our path,” said Dr Reddy at the first edition of “FICCI Dialogue for Actionable Insights?” organized by FICCI Telangana State Council on 4 Jan 2020 in Hyderabad. fiinews.com