The impact of structural reforms, such as GST and IBC, will help boost India’s growth once the cloud of the pandemic and geopolitical conflict dissipates, Chief Economic Advisor (CEA) Anantha Nageswaran said on Wednesday. Speaking at the Treasury Ministry’s iconic weekly celebrations of ‘Azadi ka Amrit Mahotsav’, the CEA said India is currently in a situation where the economy faces significant challenges, both from global macro-monetary policy and political developments.
“I also implore you to look beyond the current inflation concerns… India has emerged over the past decade with a well-repaired, improved financial system and a strengthened balance sheet… not just in the banking and financial sector ( but also in the corporate sector). “Some of these structural reforms under the government… reforms such as Goods and Services Tax, Insolvency and Bankruptcy Act (IBC) etc. may have been temporarily overshadowed by external events such as the pandemic and now the geopolitical conflict . But once these clouds disappear, they will begin to manifest and amplify India’s growth,” Nageswaran said.
The CEA said India will face challenges this year to manage sustainably high growth, moderate inflation, balance the budget deficit and also ensure the external value of the Indian rupee remains the same . He claimed that there is no pre-programmed way. card or menu of options that will help the country meet these challenges, although the Treasury Department is well prepared to handle such a situation.
The Reserve Bank raised key interest rates by 50 basis points on Wednesday to contain inflation. The central bank raised its inflation forecast to 6.7 percent, while maintaining its growth estimate for the current fiscal year at 7.2 percent.