Economists surveyed by Ficci have said the upcoming union budget must strengthen the domestic capital expenditure cycle towards boosting growth, the industry chamber said on Tuesday.
"Participating economists in Ficci's latest Economic Outlook Survey feel the government should focus on growth at this juncture. Union Budget 2016-17 must strengthen the domestic capex cycle," the Federation of Indian Chambers of Commerce and Industry said in a statement here.
"Fiscal consolidation is important, but not at the cost of productive investments," it said.
The survey, conducted earlier this year among economists from the industrial, banking and financial services sector, put the GDP growth estimate for 2015-16 at 7.4 percent.
"The results of latest round of Ficci's Economic Outlook Survey put across a median GDP growth forecast of 7.4 percent for the current fiscal year, which is lower than the advance estimate of 7.6 percent put forth by the Central Statistical Organization recently," it said.
According to the survey results, the agriculture sector is expected to record a growth of 1.7 percent this fiscal, which would be 0.3 percent lower than estimated growth in the previous round.
India's "consumer price index-based inflation has a median forecast of 5.0 percent for 2015-16, with a minimum and maximum range of 4.6 percent and 6.3 percent respectively", Ficci said.
The economists surveyed said that they look forward to government sticking on to the path to fiscal consolidation but not at the cost of curtailing productive expenditure.
"It was pointed out that the government should continue to undertake productive investments even if that means a minor slippage in the fiscal target," it added.
Meanwhile, Moody's Investors Service said on Tuesday that India's fiscal position will remain weaker than other emerging economies in the near term even if fiscal consolidation continued on course.
"Even if the budgetary consolidation continues, India's fiscal metrics will remain weaker than rating peers in the near term, because of the relatively high level of India's state and central government deficits and debt," it said in a report.
"The importance of the upcoming budget lies in its message on the government's fiscal consolidation plans," the American agency said.
"But at around 63.8 percent of GDP, India's government debt ratio remains high compared to the median of 49.5 percent for Baa3-rated peers. Without continued fiscal consolidation, India's government finances will continue to compare poorly to peers," it added.
The fiscal deficit for 2014-15 touched 4.1 percent of the GDP, while the government has targeted at containing it at 3.9 percent and 3.5 percent of GDP for this fiscal and the next, respectively.
