The stream of recent economic reforms to rejuvenate GDP growth rate: PHD Chamber


August 31, 2019

New Delhi

The stream of recent economic reforms to rejuvenate GDP growth rate: PHD Chamber

The recent economic reforms undertaken by the government and RBI will create a strong and resilient economic environment in the country and rejuvenate GDP growth rate in the coming quarters, said Mr Rajeev Talwar, President, PHD Chamber of Commerce and Industry in a press statement issued here today.

The big ticket economic reforms announced by Hon’ble Finance Minister Mrs Nirmala Sitharaman including recapitalization of Public Sector Banks, merger of 10 Public Sector Banks into 4 Banks, rollback of enhanced surcharge on Foreign Portfolio Investors, payment of all pending GST refunds to MSMEs within 30 days, withdrawal of Angel Tax provisions for Startups and their investors and more credit support for purchase of houses, vehicles, consumption goods are inspiring and would go a long way to foster strong, stable and inclusive growth environment in the country, said Mr Talwar.

These timely reform measures would mitigate the impact of emerging global headwinds such as bleak global economic outlook, US-China trade war and a looming BREXIT’s knock on effect on the economy, said Mr. Rajeev Talwar

The robust banking system becomes crucial to avoid the cascading impact of global headwinds and to strengthen the domestic industry and trade, said Mr Talwar.

The government decision to merge Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank; Canara Bank and Syndicate Banks; Union Bank of India, Andhra Bank and Corporation Bank; and Indian Bank and Allahabad Bank is encouraging as this will create large sized banks in the country and enhance the global outreach of the banking operations, said Mr. Rajeev Talwar.

The steps undertaken by the Reserve Bank of India including a significant reduction in the repo rate by 110 basis points in the last few quarters, launch of repo rate/ external benchmark linked loan products, provisions for banks’ lending to NBFCs for further on-lending to MSMEs up to Rs.20 lakh per borrower under the Priority Sector Classification, Rs. 30,000 crores liquidity support to HFCs and transfer of Rs.1.76 lakh crore by the RBI to the government would create immense scope for government spending in various needy and promising sectors of the economy, said Mr Rajeev Talwar.

The focused approach of the government for developing modern infrastructure over 5 years with an allocation of Rs. 100 lakh crores is a mjor breakthrough to boost economic growth and creation of jobs. Massive spending on railways, roads, ports, airports, water, irrigation, among others would give a big push to economic growth and pave the way to achieve a US $ 5 trillion economy, said Mr. Talwar.

Going ahead, further reforms in ease of doing business at the ground level especially for the small and medium sized businesses along with desired reforms in labour laws such as fixed term employment for flexibility in hiring by industry across the States would be crucial to strengthen the manufacturing sector, Make in India programme and create millions of employment opportunities for growing young workforce, said Mr. Rajeev Talwar.