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Economic Survey 2019: Expect progress to be made in Budget towards incentivising private investment, says Arvind Virmani

Updated : July 04, 2019 08:15 PM IST

Chief economic advisor KV Subramanian in his maiden economic survey emphasised that the trigger for 8 percent gross domestic product (GDP) growth and target of a $5 trillion economy by 2025 can be reached if private investment is given an enabling environment.

Arvind Virmani, chairman of independent public policy research firm EGROW Foundation said: “The important long term point which the Economic Survey correctly makes is to change the focus of policy from savings to investments. Indian economists and many other development economists have put more emphasis on the savings rate rather than the investment rate and therefore policies get shifted towards the former rather than the latter and I agree 100 percent with this change in focus.”

“I expect that some steps, it is not all or nothing, it is not as if there will be 100 percent implementation of this new approach, but now given this approach I do expect some progress to be made in the Budget towards incentivising private investment. For example, tax reform not only directly incentivises, but also lifts animal spirits. So these things are related,” Virmani added.

Soumya Kanti Ghosh, group chief economic adviser at the State Bank of India (SBI), said: “If you carefully go through the Economic Survey, some of the chapters which I went through, apart from unshackling the MSME sector, there is actually a law which is pending in the parliament which wants to change the definition of MSME based on turnover. So if that happens, then I think whatever has been said in the survey could become easier.”

Ghosh aded: “In the infrastructure chapter, there is a separate section which says that public private partnerships have been declining in the last couple of years and what is important is that we set forward a dispute resolution mechanism which takes care of all these disputes and these should be fast tracked over the next one year. So I believe that apart from the judicial reforms which the survey talks about in another part of the chapter, there needs to be some sort of addressing to these infrastructure bottlenecks so that the growth enabler for an 8 percent plus growth for the next five years could be ushered in."
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