India Inc today said the Economic Survey has rightly reflected a “combination of optimism and anxiety” towards the country’s growth outlook. Industry bodies CII, FICCI and Assocham also hailed steps taken by the government to resolve the “twin balance sheet” problem. “The survey is a comprehensive and forthright document which lucidly and cogently articulates the current challenges and offers credible solutions for restoring the economy on its potential growth path,” CII Director General Chandrajit Banerjee said in a statement. At the same time, CII agrees with the survey’s assessment that factors such as agricultural stress, exchange rate appreciation and sector-specific issues will impinge on the short-term outlook for the economy, he added. Expressing similar views, FICCI said the survey clearly laid out opportunities and risk factors that could have a bearing on the near to medium term growth performance of the Indian economy.
Developments such as introduction of GST, in principle decision to privatise Air India, steps taken to address the twin balance sheet problem and the continuous roll out of reforms across segments lend confidence, it said. However, “there is an element of anxiety on account of factor such as farm loan waivers, dip in non-cereal food prices and weakening performance of sectors such as power and telecommunications.” The deflationary impulses in the economy need to be countered through all possible policy levers as identified in the Economic Survey, FICCI said. Assocham Secretary General D S Rawat said the survey has highlighted the stress in various sectors such as power and telecom even as deflationary impulses are due to subdued demand.
“The survey rightly pin pointed moderation in growth in industrial output as also services, the key drivers of the economy. Both these sectors need some immediate steps like resolution of the bank NPAs and a pragmatic approach for the twin balance sheet problem,” he added. The survey today said bringing electricity under GST would improve the competitiveness of Indian industry because taxes on power get embedded in manufacturers’ costs, and can be claimed back as input tax credit. For the telecom sector, the survey said stiff price competition in the telecom sector led to dip in rates of voice call and data services but simultaneously its share in the non-performing assets of infrastructure has increased.