SME Times News Bureau | 14 May, 2019
The Indian economy will grow at 7 per cent range in the current fiscal,
said Chief Economic Advisor (CEA) Krishnamurthy V. Subramanian said on Monday.
"We maintain our projection of a 7 per cent growth rate going
forward. Given the reforms that have already been undertaken the effects will
start showing after a lag. India will be able to maintain the 'fastest growing
economy' tag ahead of China. We still have significant potential and scope to
grow strongly given the reforms that have been undertaken," Subramanian
said.
The expectation is based on the effects of the strong structural reforms
such as bankruptcy laws, Goods and Services Tax (GST), crackdown on shell
companies and the fiscal prudence undertaken in the last five years, he said.
As an effect of these measures, the current economic slowdown will gradually be
replaced by higher investment and consumption going ahead, Subramanian added.
The Asian Development Bank (ADB), the Reserve Bank of India (RBI) and the
International Monetary Fund (IMF) have cut India's GDP growth forecast to 7.3
per cent for 2019-20.
The Indian economy grew at 6.6 per cent in the December quarter, the slowest in
five quarters, which prompted the government's Central Statistics Office (CSO)
to trim its 2018-19 forecast to 7 per cent from 7.2 per cent estimated the
previous month.
The CEA responded to the current economic slowdown where he said the effect of
investments would manifest on economic growth with a lag and in an election
year, there is wait-and- watch mode by corporates before undertaking fresh fund
infusion into businesses.
He said the economy had built-up excess capacity and the utilsation was below
80 per cent leading to an investment slowdown.