NEW DELHI: The government is cautiously optimistic on the economic front and will continue to take measures to push growth, economic affairs secretary Tarun Bajaj said on Friday.
Addressing Ficci’s Annual Convention, he said the
second quarter GDP number
was much better than market expectations and it will further improve in the second half of the current fiscal.
The economy contracted by 7.5 per cent in the second quarter, as against 23.9 per cent degrowth in the first quarter of this fiscal on account of the Covid-19 pandemic.
“So we are positive. We are cautiously optimistic on the economic front. And we are hoping that our third and fourth quarter will be far better than the second quarter.
“And I may also add that not only us, but the international organisations, the rating agencies, all of them have revised their estimates upwards for the country,” he said.
On Thursday, the Asian Development Bank (ADB) upgraded its forecast for the
, projecting 8 per cent contraction in 2020-21 as compared to (-) 9 per cent estimated earlier, on the back of faster than expected recovery.
Growth will return in 2021-22, at 7.2 per cent in South Asia and 8 per cent in India, ADB said in its latest Asian Development Outlook Supplement.
Bajaj further said demand momentum continues even beyond the festive season which will push growth in the third and fourth quarters.
“We will continue to take all steps that are required for ensuring that the economy keeps going up from here, and we will see far better quarter three, quarter four and the next year,” he emphasised.
On setting up a development financial institution (DFI) for funding infrastructure projects, Bajaj said such an entity is needed.
In the months to come, there would be some good progress on that front, he said, adding the government has created a debt platform in the National Investment and Infrastructure Fund (NIIF) for which there was a Cabinet announcement.
“The government of India is committed to give Rs 6,000 crore in the next two years…that would be leveraged with debt by NIIF and we will be putting in more than Rs 1 lakh crore into infrastructure sector on the debt side …other than the equity side.
“While DFI is in the works, we are also taking other steps to ensure that infrastructure spend happens and both debt and equity are taken care of,” he said.
Bajaj also urged the industry to come forward and invest in the economy so that there is sustainable growth.
“While the government will continue to emphasise on infrastructure spend, but unless and until we have the private sector coming and taking the burden of the growth of the country, I don’t think we can have a sustainable growth.
“So we would like to know from you (industry) as to what is it that you want the government to do so that both of us can carry this forward and 2021 we start a new decade, and that decade is the decade for India,” he said.