Reforms to spur recovery in 2020: India Inc.

Vikram Kirloskar

Vikram Kirloskar  

Infrastructure push to help; industry moots sizeable cut in personal income tax

After a forgettable 2019, India Inc. is expecting a rebound in economic growth in 2020 due to the reforms announced by the Centre.

“We are bullish about the prospects for not just Vedanta but also for the Indian economy in 2020,” said Vedanta chairman Anil Agarwal.

“A lot of work, in terms of structural reforms that has happened in 2019, will start to bear fruit as we move ahead in the new year when we see India’s GDP growth picking up pace,” he added.

Last year, the government had announced a host of reforms, including reduction of corporate tax significantly from the more-than 30% to an effective rate of 25.17% and, for new manufacturing units, 17.16%.

“2020 will be one of economic rebound; the expectation is that the economy will regain its dynamic growth trajectory once again and take its position to [reaching] $5 trillion by 2025. Inflation conditions in 2020 will remain benign except for a few fluctuations because of weather disruptions, said D.K. Aggarwal, president, PHD Chamber of Commerce and Industry. At this juncture, he added, the focus of the government must be to refuel consumption demand with a significant reduction in personal income tax.

The government on Tuesday announced a detailed road map for ₹102 lakh crore worth of infrastructure investment over FY20-25, which is likely to spur economic activity and revive growth.

“It is a welcome move from the point of view of the infrastructure sector and reinforces the government’s commitment towards making India a leading world economy,” said Anshuman Magazine, chairman & CEO, India, South East Asia, Middle East & Africa, CBRE.

According to industry body CII, a gradual recovery is expected in 2020 as there are nascent signs that the economy is on a better footing than the year gone by.

With proactive measures taken by the government and the Reserve Bank of India, the industry believes that gradual recovery will soon take place.

Signs of recovery

“Nascent signs of recovery are noted in the form of improved PMIs of manufacturing and services, a jump in passenger air traffic and sharp moderation in the decline in sales of passenger cars, among others,” said Vikram Kirloskar, president, CII.

“Though we may continue to see a subdued GDP print in the third quarter, the quarters thereafter are likely to see a rebound,” he added.

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Printable version | Jun 5, 2020 9:49:11 AM |

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