FICCI comments on Economic Survey 2016-17
New Delhi, 31 January 2017: Commenting on the Economic Survey 2016-17 tabled in the Parliament today, Mr. Pankaj Patel, President, FICCI said “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. 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”, added Mr. Patel.
“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. FICCI hopes that the Union Budget to be presented tomorrow will include measures in these areas”, said Mr. Patel.
“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. 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”, added Mr. Patel.
Further, in context of the twin balance sheet problem, the Economic Survey has mooted the idea of having a centralised public sector asset rehabilitation agency (PARA). FICCI welcomes this suggestion and it is closely related to 0ur 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, in our view, should be professionally managed, majority funded by the private sector with institutional backing of the government.
FICCI has also noted the survey’s suggestion on the need to have detailed discussions on the concept of Universal Basic Income which could help improve the inclusion aspect of our growth. This is an extension of the idea that was mooted by the government earlier when it introduced the concept of JAM trinity and is currently implementing the same with full vigour.
FICCI would like to mention that alongside social security, there must be an equal emphasis on creation of jobs in the economy and all our public policies must be geared towards this objective.
“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 US. 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 Mr. Patel.