PHD Chamber's Comment on Economic Survey 2009-10

New Delhi, 25 February 2010 : Commenting on the Economic Survey presented in Parliament today, Mr. Ashok Kajaria, President, PHD Chamber, agreed that rising inflation rate, spurred by double digit food inflation is a stumbling block to the growth trajectory. The northward drift in inflation signalling a rise in interest rates will adversely affect the bottomline of the companies. However, positive signals emanating from global market place coupled with strong domestic demand has led the Survey to come up with an optimistic growth projection of 8.75 per cent in 2010-11 and return to the path of 9 percent growth in the subsequent year. Nonetheless, he agreed with the Survey that inflation is a cause for concern and an impediment in the growth of the economy.

Mr. Kajaria said that a suitable policy be formulated to ensure growth with managable inflation. For this, he whole-heartedly supports the action agenda of the Survey which reiterated that priority be given to reforms in agriculture. This would be made possible by stepping up public investment in rural infrastructure including provision of rural roads, irrigation facilities, quicker access to markets, R&D etc so that the sector achieves 4% growth. Similarly, there is a strong need to curtail revenue deficit by optimum utilisation of the resources and releasing funds to augment capital expenditure. 

There are reports that the Government, in order to reduce its fiscal deficit, could contemplate a roll back of fiscal stimulus provided to industry to counter the impact of global financial crisis. However, PHD is confident that the government will keep in view the ground realities and the global economic scenario before withdrawing the stimulus package at this juncture. No doubt, the problem of high fiscal deficit needs to be addressed but not at the cost of economic growth. 

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