Even as the government on Friday said that the recently introduced reforms have shown impact, analysts are not enthused.
Even as the government on Friday said that the recently introduced reforms have shown impact, analysts are not enthused. The government needs to give a bigger fiscal push to spur the slowing growth, however, it may not be happening soon, the experts added. “For the economy to move out of the low equilibrium path, a bigger booster is required on the fiscal side, which does not appear likely right now. How the budget gets formulated next year may also hold the cue for the economy,” Madan Sabnavis, Chief Economist, CARE Ratings told Financial Express Online. Finance Minister Nirmala Sitharaman on Friday said at a press conference that the reforms introduced in the last few months have helped to boost the economy.
The government is focusing on increasing consumption to prop up economic growth, Chief Economic Advisor (CEA) Krishnamurthy Subramanian also said. Contrary to the government’s view, investment advisor Sandip Sabharwal told Financial Express Online that the government had nothing substantial to say in the press conference. “A damp squib press conference. Pontificating on what all they have done. Not ready to accept the dismal state of the economy. NBFC Refinance – Nothing happening. Real Estate AIF- Nothing..Arbitration dues- Nothing..Markets might be on steroids but they are on thin ice,” he added.
Finance Minister Nirmala Sitharaman, CEA K V Subramanian and other top officials of the finance ministry today addressed the press conference on several economic issues and measures undertaken by the government. Krishnamurthy Subramanian also said that the mechanism set up by the government has helped to increase liquidity in the system. The government may have successfully addressed the supply side concerns, demand-side issues still need to be resolved, Ranjan Chakravarty, Economist, Metropolitan Stock Exchange (MSE) told Financial Express Online. “Every supply side act on the Fin Min’s side is uniformly excellent and these announcements will go a long way to allaying the uncertainty that has crept in to the supply side. What remains are the unaddressed demand side measures: tax cuts, which lie in the Finance Ministry’s domain and the lack of easing by the RBI, which, unfortunately, does not”, Ranjan Chakravarty, Economist, Metropolitan Stock Exchange (MSE) told Financial Express Online.
“The continued strong inflows of FDI demonstrates the strength of the fundamentals of the economy. While we may have immediate pains in the economy, we believe that some of the steps undertaken recently by the government and a possible counter cyclical push in the budget should support sentiments and growth rates”, Ranen Banerjee, leader-public finance and economics, PwC India said.