While taking positive cues from the growth outlook of over 8% for next fiscal pegged in the Economic Survey, Corporate India today said the government must take steps to boost capital formation and stay on the reforms course to sustain high growth.
"The Economic Survey has highlighted that India is at the cusp of a higher growth trajectory. While the process of recovery has started, we need to continue with the reforms process to ensure that we are firmly rooted on a sustainable growth path," Ficci President Jyotsna Suri said..
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"With the government remaining committed to fiscal consolidation and with inflation remaining benign, there is room for easing of monetary conditions leading to a lower lending rate framework in the country that would aid both consumption and investment demand," she added.
The Economic Survey 2014-15 tabled today in Parliament said India's GDP is likely to grow at 8.1-8.5% next fiscal and accelerate to double-digit levels in the coming years on the back of reforms, falling crude prices and likely cut in interest rates.
"At the present moment, there is need for the government to step in for capital creation, which would help 'crowd in' private sector investment. Especially in the areas of infrastructure, a reverse Build Operate Transfer (BOT) model would be an effective mode of getting investments going," CII Director General Chandrajit Banerjee said.
"Economic Survey rightly highlights the need for big bang reforms and focus on investment cycle to revive to economy. With inflation below target levels and space for monetary easing, the Budget can well lay out clear roadmap to accelerate the growth momentum for India," said Rajat Rajgarhia, Managing Director-Institutional Equities at Motilal Oswal Securities.
However, PHD Chamber President Alok B Shriram said although private investments would remain the primary engine of long term growth, 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.
The medium-term strategy to reduce fiscal deficit to the established target of 3% of GDP is inspiring as it will attract the foreign investors to invest in India, going forward, he added.
"The assertion that there is a scope for Big Bang reforms is rather reassuring for the industry," Assocham President Rana Kapoor said.
However, he expressed concern over untargeted subsidies, saying compression in government expenditure which may result slow recovery in growth.