New Delhi: The Indian economy is expected to make a gradual recovery by the next fiscal in the backdrop of easing of global trade tensions and improved transmission, said Confederation of Indian Industry (CII) president Vikram Kirloskar here on Monday.
“The easing of global trade tensions along with the lagged impact of monetary easing coupled with the improved transmission, and we are in for a gradual recovery getting firmly entrenched by the next fiscal,” said Kirloskar in a statement.
He said that “even though we may continue to see a subdued GDP print in the third quarter as well, but the quarters thereafter are likely to see a rebound.”
“A critical issue that industry highlighted in the past year is that of pending payments from the government departments and the CPSEs. All outstanding payments need to be released at the earliest to vendors in the private sector. This would boost liquidity in the private sector,” Kirloskar said.
CII president-designate Uday Kotak said: “Just like our medium-term inflation target range, we can have a Flexible Fiscal Policy target which will set a central target for the fiscal deficit with a range of around 0.5 percent to 0.75 percent.”
“The additional availability of funds may be spent on key infrastructure projects which can be implemented quickly. This is likely to have a significant multiplier effect on the economy,” he said.
In the subsequent years, there can be a glide path to converge to the FRBM trajectory over a 2-3 year timeframe, he added. The confederation also highlighted the need to build business confidence through policy stability.