 "Experts ask govt to continue with reforms")
Gita Gopinath, professor of economics at Harvard University, cited the example of the current account deficit (CAD), contained at a comfortable level of 1.7 per cent of GDP (gross domestic product) in 2013-14. However, if one sees the recent export and import data, CAD might turn out to be higher, she warned.
India's trade deficit widened to $14.25 billion in September, following a jump in oil and gold imports.
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Similarly, she said, over 40 per cent of the consumer price index comprises food items, which might not remain at a low level.
"Things are on the edge. These can go wrong. Reforms will have to be maintained," she said.
Anand Mahindra, chairman and managing director of Mahindra & Mahindra, said the government is facing enormous pressure to walk the talk.
Talking about the importance of a national Goods and Services Tax (GST), he said logistic costs could be reduced by three to four per cent if border costs were eliminated.
To a query from the floor, he said if GST is not introduced, industry will have to live with what it has been living with all these years.
"GST must become a priority," he added.
Gopinath said land acquisition amendments and labour reforms are needed to move on higher economic growth.
She said consumer goods in the Index of Industrial Production have still not moved up and the investment rate is stuck at 32 per cent of gross domestic product.
Confederation of Indian Industry (CII) President Ajay Shriram said positive things would come from the new government, though the pace might vary.
Amid the finance ministry continuously asking rating agencies to upgrade India's sovereign grade from the current lowest investment score, Gopinath said if the pace of reforms continues, consumer goods production increases and the government sticks to the fiscal deficit targets, there is a case for the upgrade.
Finance Minister Arun Jaitley said, "We should doggedly pursue reforms."
Mahindra said with a new government taking charge, not only have sentiments improved but the economy has started showing signs of growth, on the back of various steps taken by the Narendra Modi government.
"This (Indian economy) is a large flywheel. It is not a jump-start, it takes a while to gain momentum. I see signs that the flywheel is beginning to move," he said.
Highlighting the significance of a "little dose of reforms" undertaken by the new government and how it would eventually add to "big-bang reforms", Mahindra said, "By the first quarter of the next fiscal (financial year), you'd see palpable signs of growth."
While appreciating the steps taken by the new government such as extending the excise duty cut, he said it is time to bring down taxes in the auto industry.
Bajaj said excise duty concessions given to auto sector should be extended once again at least till the next Budget, as the industry is not out of the woods as yet. The concessions are due to expire in December.
Uday Kotak, executive vice-chairman and managing director of Kotak Mahindra Bank, also said he would prefer to see a marathon than a sprint, alluding to small doses of reforms and big-bang reforms.
He pegged economic growth in the next five years at over 6.5 per cent a year on an average. "This means a growth of 7-8 per cent in the concluding year," he said.
Kotak said India's macro economic parameters have significantly improved. Markets have surged and the real economy is catching up.
He said global liquidity is not a matter of concern as of now, but one has to watch the interest rate cycle in the United States.