The much-awaited Budget of the new government is indeed a tightrope walk for the finance minister to find a sustainable means to stimulate growth while dealing with the challenge of fiscal pruden
ce. While timely actions of the government, in the form of stimulus packages, have undoubtedly helped combat the effects of the global economic slowdown in India, there are still a few sectors that have not yet come out of the resultant stress. There continues to be indications of weakness in investment demand, even as consumer demand has shown signs of recovery. Although there are slow, but clear signs of recovery in terms of investors and consumers, there are nevertheless definite challenges that lie ahead. Challenges that need immediate attention. One such is to continue to revive the economy with emphasis on preserving rural demand, which is set to peak due to the possible delay in the onset and magnitude of monsoon. Another major challenge is to secure high rates of growth in the short term by promoting investments and securing growth in the medium to long term by addressing the structural challenges of pursuing long-awaited economic reforms. The mere mention of this in any Economic Survey is like a breath of fresh air to investors. Investment in infrastructure is critical, both to stimulate investment demand and to facilitate growth in the medium and long term. The challenge is how we fund infrastructure investments, given that market sentiments favouring investment have just started to pick up, with the appetite for risk still running very low. The classic solution would be public investment, but that, too, is currently starved of funds. To a certain extent disinvestment can help, but given the enormity of the need for infrastructure funding this still remains a huge challenge that calls for innovative solutions. It is important, however, to recognise that the positive aspect of infrastructure spending is that it has a huge multiplier effect.
ce. While timely actions of the government, in the form of stimulus packages, have undoubtedly helped combat the effects of the global economic slowdown in India, there are still a few sectors that have not yet come out of the resultant stress. There continues to be indications of weakness in investment demand, even as consumer demand has shown signs of recovery. Although there are slow, but clear signs of recovery in terms of investors and consumers, there are nevertheless definite challenges that lie ahead. Challenges that need immediate attention. One such is to continue to revive the economy with emphasis on preserving rural demand, which is set to peak due to the possible delay in the onset and magnitude of monsoon. Another major challenge is to secure high rates of growth in the short term by promoting investments and securing growth in the medium to long term by addressing the structural challenges of pursuing long-awaited economic reforms. The mere mention of this in any Economic Survey is like a breath of fresh air to investors. Investment in infrastructure is critical, both to stimulate investment demand and to facilitate growth in the medium and long term. The challenge is how we fund infrastructure investments, given that market sentiments favouring investment have just started to pick up, with the appetite for risk still running very low. The classic solution would be public investment, but that, too, is currently starved of funds. To a certain extent disinvestment can help, but given the enormity of the need for infrastructure funding this still remains a huge challenge that calls for innovative solutions. It is important, however, to recognise that the positive aspect of infrastructure spending is that it has a huge multiplier effect.For further details visit as : economictimes.indiatimes.com/articleshow/4742115.cms
No comments:
Post a Comment