The Indian economy may see a growth of 9.5 per cent in this fiscal year, said former chief economic adviser Arvind Virmani on Tuesday.
Virmani, speaking at a virtual event organised by industry association PHDCCI, said that while government spending and exports peaked, private consumption has yet to rebound due to COVID-19.
“The current financial year’s growth will be higher and close to 9.5 per cent. And this decade’s (FY21-FY30) average growth will be 7.5 per cent plus-minus 0.5 per cent,” he said.
According to the statistics released by the Centre, the Indian economy is projected to grow at a 9.2 per cent rate in 2021-22, as against a 7.3 per cent contraction in the previous fiscal.
The Reserve Bank of India (RBI) has slashed its growth estimates for the current financial year to 9.5 per cent, while the International Monetary Fund (IMF) is projecting the growth rate to be at 9.5 per cent in 2021, and 8.5 per cent in the following year.
India’s GDP growth is now positive, noted the prominent economist, but job growth is sluggish. He emphasised the importance of Micro, Small, and Medium Enterprises (MSMEs) for inclusive growth, saying that contemporary MSMEs should have the opportunity to compete with the corporate sector.
Arvind Virmani believes the COVID-19 pandemic has dented the economic recovery and urged tax reforms.
According to him, the GST council appears to be focused on short-term income maximisation.
“Revenue negative GST simplification needed to provide a consumption stimulus to the economy and quickly restore lost jobs and wages,” he said.