The impact of structural reforms, like GST and IBC, will help boost India's growth once the cloud of the pandemic and geopolitical conflict recedes, Chief Economic Advisor (CEA) Anantha Nageswaran said on Wednesday.
Speaking at the Finance Ministry's iconic week celebrations of 'Azadi ka Amrit Mahotsav', the CEA said India is facing challenges due to both global macro monetary policies and political developments.
“I also implore you to look beyond current concerns about inflation...India has emerged out of the previous decade with its financial system well repaired, improved and balance sheet strengthened...not just in the banking and financial sector, (but also in the corporate sector),” Mr. Nageswaran said.
“...reforms such as Goods and Services Tax (GST), Insolvency and Bankruptcy Code (IBC) etc. might have been temporarily overshadowed by external events such as the pandemic and now the geopolitical conflict. However, once these clouds recede they will begin to manifest and enhance India's growth,” he added.
According to the CEA, India’s challenges this year include managing sustainably high growth, moderating inflation, keeping fiscal deficit under balance, and also ensuring that the external value of the Indian rupee remains the same.
He asserted that there is no pre-programmed road map or menu of options that will help the country deal with these challenges, though the finance ministry is well-prepared to tackle any such situation.
The Reserve Bank on Wednesday hiked the key interest rate by 50 basis points to tame inflation. The central bank also raised inflation projection to 6.7 per cent, while maintaining a growth estimate at 7.2 per cent for the current fiscal year.
