 "Assocham wants infra spend be increased to 10% of GDP")
The finance ministry is not sure whether the economic growth will touch eight per cent in the current financial year, but Assocham is confident it will. The industry chamber in its mid-year review pegged the country's economic growth in 2015-16 at 8.1-8.2 per cent.
"The renewed optimism comes about despite continuation of a global meltdown in commodity prices with crude oil trading well below the $40-barrel mark, while the entire metal pack is melting away in the heat of crisis. But , it is the domestic demand pick-up, supported by government investment and the services sector, especially transport, hotels and trade that will push the Indian economy to cross the psychologically important level of eight per cent," it said.
The finance ministry's mid-year analysis slashed economic growth projections from 8.1-8.5 per cent to 7-7.5 per cent for 2015-16.
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"Asia's third-largest economy is now expected to grow 7-7.5 per cent in the year ending in March 2016," the finance ministry said in its mid-year economic review.
In the first half of 2015-16, the country's economy expanded only 7. 2 per cent. Assocham made quite an optimistic forecast of nine per cent and above growth in 2016-17, if the government and the Congress come together and clear the goods and services tax Constitutional amendment Bill in Parliament and it is rolled out from April 2016.
For the current financial year, Assocham said the latest revival in manufacturing which helped overall index of industrial production reach 9.8 per cent in October, along with a robust pick-up in electricity and capital goods would trigger the growth trajectory. In the process, a lot more activities in the services would get a boost.
The number of passengers handled by the civil aviation sector in the second quarter of the current financial year went up by 17 per cent. So was the case with commercial vehicles, which registered a growth of 10.7 per cent, another indicator of a pick-up in economic activity, it said.
There was a catch-up seen by 3.5 per cent in the case of civil aviation cargo and 3.9 per cent by major ports during the second quarter of 2015-16.
