The Federation of Indian Chambers of Commerce and Industry (FICCI) recently urged the government not to worry too much about the fiscal deficit and try to pump the economy by raising investments to arrest slowdown and accelerate growth. A mechanism should be found to infuse ₹1.5 to ₹2 lakh crore into the economy as it would help spur consumption, FICCI said.
"The nature of the economy is cyclical and when a potential recessionary cycle is foreseen, move to induct more capital into the economy to re-energise it is more important than worrying about fiscal deficit. A time-bound plan must be put in place on the mechanics to repair fiscal deficit through different measures, including disinvestment in PSUs," FICCI president Sangita Reddy said in a statement.
With the slowdown in economic growth, the government will face difficulty in adhering to the fiscal deficit road map laid down in the FRBM Act.
"Union Budget 2020-21 is to be announced soon and we look forward to government continuing taking steps towards bridging the existing gaps and giving out positive signals to boost the sentiment, consumption and investments. Apart from providing cheaper loans, more efforts must be made to increase incomes, especially in the rural areas. This can be achieved through an increase in the quantum of income support under PM-KISAN and expansion of the Direct Benefit Transfer scheme. Steps are also required to boost construction, infrastructure and exports," said Reddy.
"FICCI is also of the view that a significant focus on the economies of the future technologies like artificial intelligence, along with added stress on science and innovation, are also critical to add a parallel wave of growth," she added.
Fibre2Fashion News Desk (DS)