Expressing confidence over growth of Indian economy, the industry body, Federation of Indian Chambers of Commerce and Industry (FICCI) has said that the country’s economic growth story remains intact with the Gross Domestic Product (GDP) expected to grow around 7.5% in the current financial year, despite short-term challenges. It also said that growth will improve further in the coming years.
FICCI said the short-term challenges are slowing down of the industrial output in May to 3.2% and the inching up of the retail inflation in June to 5%. It further said that these challenges are being pro-actively tackled by the government and the Reserve Bank of India (RBI) observing that these indicators should not be seen as hurting the signs of revival in the economy significantly. It added that the industrial output growth is expected to rebound in the next few months.
The industry body also said that the Goods and Services Tax (GST) will play the role of a catalyst in this. While the GST collection trends clearly indicate towards a positive sentiment in the economy, the national integrated indirect tax structure will also bring down inflation, going ahead. It said with the GST Council and the central government open to taking measures for rationalising the GST rate structure, bringing in the excluded items and simplifying the tax administration, GST is all set to boost the GDP growth further.
Along with this, FICCI said the reform measures like Insolvency and Bankruptcy Code (IBC) and Real Estate (Regulation and Development) Act, 2016, which have already started yielding good results, will help in strengthening the revival of animal spirits and take the GDP growth beyond 8%.
