No. PR- 208
January 29, 2021
V shaped recovery and 11% GDP growth in FY2021-22 depicted by Economic Survey inspiring: PHD Chamber
Looking forward to a vibrant, demand boosting and growth oriented Union Budget 2021-22
Mr Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, while appreciating the Economic Survey 2020-21 said that Economic Survey very well portrays the economic thought process of the government through its four-pillar strategy of containment measures, fiscal support, financial measures and long-term structural reforms to mitigate the daunting impact of COVID-19 on trade, industry and economy and take the country to a higher economic trajectory, going forward.
The Economic Survey 2020-21 projections for India’s growth at (-)7.7% in FY2020-21 with significant growth rebound to the level of 11% in FY2021-22, following a v-shaped growth recovery is highly encouraging for businesses to move forward with a strong zeal and strength, said Mr Sanjay Aggarwal.
It is inspiring to note that Government Final Consumption Expenditure (GFCE) sustained the growth of GDP in FY 2020-21, with its share increasing to 14% of GDP from 12% of GDP in FY 2019-20, which has significantly mitigated the daunting impact of pandemic COVID-19, said Mr Sanjay Aggarwal.
Though, deceleration in gross investments impacted the GDP in 2021, with its share in GDP decelerated at 26.7%, which is lowest in 2000s, recovery in gross investments is expected on the back of varous reforms undertaken by the Government in ease of doing business and also efforts for reduction in the cost of doing business, such as cost of logistics, said Mr Sanjay Aggarwal.
It is laudable that India recognised the disruptive impact of the pandemic and charted its own unique path amidst dismal projections of it spread in the country given its huge population, said Mr Sanjay Aggarwal.
The clear objective of ‘Jaan Hai to Jahan hai’ and to ‘break the chain of spread’ at a time of rapid change and mounting uncertainty, helped the government face the dilemma of ‘lives vs livelihood’ and set the pace and sequence of policy interventions and adapt its response as per the evolving situation, said Mr Sanjay Aggarwal.
The Survey recognizes the achievement of the country to became the fastest country in the world to roll-out 10 lakh vaccines in a matter of six days. It is highly encouraging that the initiation of a mega COVID-19 vaccination drive will help economy’s return to normalcy along with raising hopes of a robust recovery in services sector, consumption, and investment, going forward, said Mr Sanjay Aggarwal.
The survey suggests that the economic recovery and rejuvenation will further be supported by supply-side push from reforms and easing of regulations, push to infrastructural investments, boost to manufacturing sector through the Productivity Linked Incentive Schemes, recovery of pent-up demand for services sector, increase in discretionary consumption subsequent to roll-out of the vaccine and pick up in credit given adequate liquidity and low interest rates, which is highly encouraging, said Mr Sanjay Aggarwal.
It is highly encouraging that the Government policy response was tailored to different phases of the epidemic, adapting to evolving requirements to provide succour to people, support demand, facilitate the recovery to pre-pandemic levels and ensure fiscal and debt sustainability. It is inspiring that a gradual, smooth transition was paved from ‘Jaan Hai to Jahan hai’ to ‘Jaan bhi aur Jahan bhi’, said Mr Sanjay Aggarwal.
The survey indicates that the overall policy response of the Government aimed at making the Indian economy more resilient and flexible to deal with the opportunities and problems of the post-COVID world, said Mr Sanjay Aggarwal.
The Survey indicates that India’s mature policy response to this once-in-a-century crisis provides important lessons for democracies to avoid myopic policymaking and demonstrates the significant benefits of focusing on long-term gains.
We highly appreciate the Government focus on incremental health expenditure in tune of 2.5-3%, which will reduce the out of pocket expenses to 30% from 65% currently, said Mr Sanjay Aggarwal.
Going ahead, we look forward to a vibrant growth oriented budget which ensures a great support to demand creation in the economy with lower interest rates for consumers and businesses, lesser compliances for MSMEs vis-à-vis ease of doing business at the ground level and a lower tax regime to increase the personal disposable income of the people to rejuvenate the economic growth trajectory in the coming times, said Mr Sanjay Aggarwal.
PHD Chamber of Commerce and Industry