New Delhi: Industry chambers Thursday termed the 7 per cent GDP growth for 2019-20 pegged by the Economic Survey a ‘pragmatic target’ that pointed towards a cautious optimism about the economy on the back of investment revival and rural consumption.
CII, FICCI and Assocham said in order to clock 8 per cent growth to achieve the objective of becoming a $ 5-trillion economy by 2024-25, concerted effort is required to drive private investment, enhance consumption and address difficult issues like liquidity concerns of NBFCs.
“The 7 per cent growth pegged by the Economic Survey for 2019-20 is a pragmatic target and with the right policy levers in place, we can step up growth to sustain an average growth rate of 8 per cent over the next five years,” CII Director General Chandrajit Banerjee said in a statement.
He also agreed with the Survey’s key prognosis that for sustaining growth at 8 per cent, investment would need to be the key driver for heralding simultaneous growth in demand, jobs, exports and productivity.
“Concerted effort is required to drive an improvement in private investment along with robust consumption to lift growth in the current fiscal from a multi-year low of 6.8 per cent posted in 2018-19,” Banerjee said.
FICCI President Sandip Somany said although 7 per cent is amongst the highest in world, yet it is lower than the desired growth of 8 per cent plus required for achieving the goal of $ 5 trillion economy.
“Strengthening investment cycle has to be the topmost priority and we hope that the Union Budget will provide specific measures to boost investment, consumption and savings rate in the economy,” he added.
ASSOCHAM President B K Goenka said the 7 per cent growth projection for the current fiscal points towards “a cautious optimism about the economy”.
“The positives in the Economic Survey do give us hope to ride over some of the challenges faced by the economy. Some of the difficult issues like the liquidity concerns of NBFCs and the impact on the consumption would require bold moves by the government and the RBI,” he added.
Goenka also said the focus on direct transfers to farmers and greater attention to agriculture infrastructure would raise the rural income and demand, giving a boost to growth.
“However, monsoon would be a key factor to watch,” he added.
PHDCCI President Rajeev Talwar said the roadmap to achieve economic size of $ 5 trillion should focus on 8 per cent economic growth with a whopping growth in manufacturing sector and tremendous increase in the size of exports.
At this juncture, bold and flexible labour reforms would be crucial to create employment opportunities for millions of growing young workforce, he said.
Stressing on economic policy uncertainty that has been underlined by the Survey as one of the key factors impinging on investment potential, Banerjee said an index on the same must be created to track and monitor it at the highest level on a quarterly basis.
Dalmia Bharat Group Managing Director Puneet Dalmia lauded the survey for stressing on the importance of an eco-system balance that has been displaced due to hard hitting climate change realities.
“It is important to face these challenges with sustainable manufacturing operations, keeping environmental implications on natural resources such as water in consideration,” he added.
Stressing on economic policy uncertainty that has been underlined by the Survey as one of the key factors impinging on investment potential, Banerjee said an index on the same must be created to track and monitor it at the highest level on a quarterly basis.
“This in turn will increase transparency on economic policy in the country,” he added.
Goenka on the other hand said global headwinds, as highlighted in the Survey, would need to be tackled well, as the threat of protectionism is real in the key economies of the world.