 "A realistic survey of economic stresses, challenges: analysts")
The Economic Survey today pegged economic growth at 5.4-5.9% for 2014-15, after it crawled at sub-5% levels in the previous two financial years. It asked the government to go for fiscal consolidation, rein in inflation, ease procedures and simplify tax policies to revive the investment climate. Below are some analyst views about the report.
R SIVAKUMAR, HEAD OF FIXED INCOME, AXIS ASSET MANAGEMENT, MUMBAI
"I think it's reasonable (regarding the GDP growth estimate). There is some evidence of an industrial growth pickup, so I don't think they are too far off the estimates.
Over the last few years we have seen the quality of expenditure deteriorate, i.e. higher amount of subsidies and lower amount of capex and planned expenditure, as well as the tax-to-GDP ratio stagnate. We will have to wait until tomorrow to see what actions are taken on these steps.
They are talking about removing or amending laws, which allow government interference of markets. These clearly reflect the new government's pro-business outlook.
From the budget what we expect to see is something where they adhere to some form of discipline, not make more announcements which they cannot achieve."
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A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI
"It's definitely reassuring to know that the finance ministry and RBI are on the same page when it comes to inflation. They are speaking in one voice about the need for inflation (CPI) targeting as a key to promoting growth of the economy,"
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
"It is a highly realistic survey in its assessment of economic stresses and fiscal challenges. Given the unique political setting of stability that India enjoys today, it is highly probable that many of its recommendations will actually get implemented in the budget tomorrow."
NIRAKAR PRADHAN, CHIEF INVESTMENT OFFICER, FUTURE GENERALI INDIA LIFE INSURANCE, MUMBAI
"The focus on fiscal consolidation and inflation shows the government's focus on the two main risks for the Indian economy.
"Going forward, if monsoon behaves, there will be nothing to worry about. 2014/15 GDP growth pegged between 5.4 to 5.9% is good, as it shows we will break the trend of sub-5% growth rate seen over the last 2 years. One should expect GDP growth to reach about 8% in the next 2 years."