Driven by its structural strengths and improving policy environment, the Indian economy is looking up and the growth prospects are bright to attain double digit growth trajectory in the coming times, said Alok B Shriram, president, PHD Chamber of Commerce & Industry (PHDCCI) in a press release issued here on Friday. The critical macro-economic worries such as persistent inflation, higher fiscal deficit, external account imbalances and oscillating value of rupee are now behind us and the economy is set to attain sustained macroeconomic stability, going forward, he said.
The growth rate anticipated for the FY 2015-16 in the Economic Survey at around 8 per cent is inspiring and is achievable and we look forward to enter the double digits growth trajectory, said Shriram. However, decline in the rate of gross domestic savings as indicated by Economic Survey during the recent years vis-à-vis decline in the rate of household physical savings needs to be seriously looked in as the household savings are also a major source of investments, he said.
Household savings are a significant part of the gross capital formation in the economy. However, still a large chunk of household savings, around 50 per cent happens in physical assets that need to be channelised in the financial savings in the coming times, said Shriram. Though private investments would remain the primary engine of long term growth, the increase in public investments in crucial areas of importance such as agriculture infrastructure and Railways are needed to attract more and more private sector and public-private partnership investments in these areas.
As expressed by the Economic Survey, during the last few years, several projects were in lackluster trajectory and stalled. The revitalising of PPP model would be critical to speed up the completion of ongoing projects, he said. The medium term strategy on fiscal scenario to reduce fiscal deficit to the established target of three per cent of GDP is inspiring as it will attract the foreign investors to invest in India, going forward, Shriram said.
As the survey it indicates, the manufacturing productivity in India lags behind other nations and registered manufacturing couldn’t bridge regional disparities in India, we need to address seriously the distortions in labour market, capital market, land market and skilling of our youth to become competitive, he said. We must capitalise on our comparative advantage in availability of vast pool of workforce with skill development to strengthen India’s growth story in the coming times, Shriram said.
The Indian economy is becoming more resilient and promising supported by the new initiatives of the government such as launching fresh initiatives such as Make in India, Digital India, creating National Industrial Corridors Authority streamlining environment and forest clearances, labour reforms, ordinance to streamline land acquisition and launch of investor friendly FDI policy, he said. Going ahead, there is a scope for big bang reforms as there is political mandate for reforms to happen and benign external environment also to capitalize on the available opportunities, Shriram said.
