India’s economy is set to grow at a much faster pace in the coming months and years on the back of strong fundamentals, a landmark clean-up drive and ambitious reforms initiated by the present government, said P. K. Mishra, Principal Secretary to Prime Minister Narendra Modi.
“Our economic fundamentals are strong,” Mr. Mishra asserted, addressing the 30th convocation of Sambalpur University in the western Odisha town of Burla on Friday. “During the period 2014 to 2019, our annual average GDP growth of 7.5% was the highest since independence. It was also the highest among the G20 countries. Macro-economic stability during the last five years has been the bedrock on which various reforms have been rolled out.
“We have kept inflation low, fiscal spending disciplined, and current account deficit under control. If we compare the two periods, 2009-14 and 2014-19, inflation has decreased from 10.3% to 4.5%, fiscal deficit from 5.3% to 3.4% of GDP, and current account deficit from 3.3% to 1.4% of GDP,” he said.
Mr. Mishra, however, acknowledged that in recent months India had witnessed a slowdown in growth.
“It is important to understand the various factors feeding into the slowdown, especially cyclical ones. There is a slowdown in global growth, of output. Intensive efforts to bring about transparency, prevent leakages and improve governance would have also caused some transitory disruptions. The strong corrective action of the past five years, of emphasising on rule of law and formalisation of the economy, are bound to have a short-term drag effect,” said the Prime Minister’s aide.
An alumnus of the Delhi School of Economics and the University of Sussex, Mr. Mishra said the government was alert and active.
“A number of measures have been taken to reform and rejuvenate the financial sector and the real economy. Landmark steps to increase productivity of the factors of production such as land, labour and capital are also being worked out. On the whole, given the strong fundamentals, landmark clean-up drive and ambitious reform agenda initiated, India is set to grow at a much faster pace in the coming months and years. Immense economic opportunities are unfolding for all of you,” he asserted.
“PM Modi has set a goal of becoming a five-trillion-dollar economy by 2024. While this is an ambitious aspiration, we are on track and fully committed to the same,” said Mr. Mishra.
The top official said introduction of the Insolvency and Bankruptcy Code in 2016 was a landmark step towards cleaning up and strengthening the financial system of the country.
“No one would have imagined 4 or 5 years ago, that even large corporates would be held accountable if they tried to play with the system, that they would lose their assets if they did not pay back their loans. Implementation of the Goods and Services Tax in 2017 also stands out as a critical measure for unifying India economically as one common market,” he pointed out.
Continuous opening up and liberalisation of foreign direct investment norms had resulted in unprecedented inflows of FDI into the country, added Mr. Mishra.