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 right now in a situation where the economy faces a considerable amount of challenges both from 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). Some of these structural reforms under the government...reforms such as Goods and Services Tax, 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,” Nageswaran said.
The CEA said, this year India will be facing challenges of managing sustainable high growth, moderating inflation, keeping fiscal deficit under the 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 key interest rates by 50 basis points to tame inflation. The central bank upped the inflation projection to 6.7 per cent, while maintaining the growth estimate at 7.2 per cent for current fiscal year.