CEA Subramanian on fiscal deficit: Growth key priority for now, but govt has eyes on target

By: |
Published: October 18, 2019 4:21:19 PM

Even as the current priority is to boost growth, the government has its eyes set on getting fiscal deficit right, Chief Economic Advisor (CEA) Krishnamurthy Subramanian said.

Krishnamurthy Subramanian, 5 trillion economy, GDP, indian economy, Make in India, investment in india,  labour laws, employmentAt this point, it’s important to do all that helps in bringing the economy back on the high growth path, he added.

Even as the current priority is to boost growth, the government has its eyes set on getting fiscal deficit right, Chief Economic Advisor (CEA) Krishnamurthy Subramanian told CNBC TV-18 in an interview. The divestment and RBI dividend would help the government to keep the fiscal deficit under control, he also said. “If you look at actions that the government has taken, right now the priority clearly is that we are taking all the necessary steps to be able to get back on the high growth path, and that is the important aspect at this point in time. That said, the macroeconomy is always a delicate balancing act,” CEA Krishnamurthy Subramanian also said. At this point, it’s important to do all that helps in bringing the economy back on the high growth path, he added.

On Wednesday, CEA emphasized the need for private companies to come forward and give a boost to the economy by making investments. Reaffirming that while India’s economic fundamentals remain strong, it is investments that are hampering growth and is resulting in a slowdown. “The key driver is an investment. It is an investment that enhances productivity. Productivity then enhances purchasing power and creates better-paying jobs and demand,” Krishnamurthy Subramanian said at an event. “Around 2008-2009, our investment rates were touching 40% of the GDP. That has declined now due to the banking sector, the NPAs… the investment rates have slowed down significantly,” Subramanian added.

Also read: What pulls down China’s GDP growth to slowest level since 1992

Meanwhile, the economy is undergoing a slowdown with the first quarter of the ongoing fiscal posting a muted growth rate of 5.1 per cent. The government has announced a slew of measures over the last few weeks in order to revive the slowing economy.

Do you know What is Fiscal Policy in India, Expenditure Budget, Customs Duty, Reverse Repo Rate, Receipt Budget? FE Knowledge Desk explains each of these and more in detail at Financial Express Explained. Also get Live BSE/NSE Stock Prices, latest NAV of Mutual Funds, Best equity funds, Top Gainers, Top Losers on Financial Express. Don’t forget to try our free Income Tax Calculator tool.

Next Stories
1US imposes tariffs on EU goods, targeting Airbus, wine and whisky
2China’s GDP growth slows to 6 per cent in Q3, slowest since 1992
3Recalling when and what went wrong during a certain period is necessary, says Nirmala Sitharaman