Acknowledging that there was a slowdown in the Indian economy and opining that it was cyclical in nature, Chief Economic Advisor (CEA) Krishnamurthy Subramanian revealed that the government had a well-planned reform agenda in place to tackle it. Speaking at the FICCI Young Leaders Summit on Monday, he cited the example of the Centre’s move to cut the corporate tax rate. Subramanian contended that private investment was a key driver of sustained economic growth. These remarks assume significance at a time when India’s Gross Domestic Product (GDP) slumped to a 7-year low of 4.5% in the July-September quarter.
The current slowdown is a lot more on the cyclical side. The steps we are taking are intended to create a more favourable environment for investments that are required for sustained growth: @FinMinIndia Chief Economic Advisor Dr @SubramanianKri at #FICCIYoungLeaders Summit. pic.twitter.com/RERplYld8G— FICCI (@ficci_india) December 9, 2019
Investment, especially private investment, is the key driver of economic growth: Dr @SubramanianKri, Chief Economic Advisor, @finminIndia at #FICCIYoungLeaders Summit in New Delhi. pic.twitter.com/SXDNRFoPUY— FICCI (@ficci_india) December 9, 2019
The GDP growth rate of the previous (April-June) quarter was 5%. However, the latest figures indicate that the Centre’s economic moves such as the merger of 9 PSU banks into 4, major corporate tax cuts, policy changes in the automobile sector, simplification of tax regulations do not seem to have made an immediate impact on the economy. After being released on bail from Tihar jail, senior Congress leader and Rajya Sabha MP P Chidambaram slammed the government on the state of the economy and alleged that the real GDP was even lesser due to suspect methodology.
"Nothing sums up the state of the economy better than the following series of numbers: 8, 7, 6.6, 5.8, 5 and 4.5. Those are the quarterly growth rates of GDP in the last six quarters. The third and fourth quarters of 2019-20 are not likely to be any better. Please remember Dr. Arvind Subramanian’s caution that 5 percent under this government, because of suspect methodology, is not really 5 percent but less by about 1.5 percent," said Chidambaram.