Chief Economic Adviser says reforms in GST, Insolvency and Bankruptcy Code will spur growth after ‘clouding’

The pandemic and the ongoing geopolitical conflict may have “temporarily overhauled” the government’s recent structural reforms such as the Goods and Services Tax (GST) and the Insolvency and Bankruptcy Code (IBC), but these “clouds may have subsided”. They will further enhance India’s growth potential”, Chief Economic Adviser V. Ananth Nageswaran said on Wednesday.

Nageswaran said, “We are now in a position where both global macro-monetary policy and geopolitical developments pose significant challenges to the Indian economy.”

The CEA said that “adroit and flexible policy making” will be the key to manage this year’s challenges to maintain a sustained high growth rate, moderate inflation, keep fiscal deficit in balance and ensure that “Indian Rupee The external value of it remains constant”. , adding that the Finance Ministry is well prepared for the necessary balancing act for this.

“Naturally, there is no pre-programmed roadmap or a menu of options that will help us get past these challenges…

Urging people to “look beyond the current concerns of inflation, oil, food, fertilizers and central bank interest rates”, Mr. Nageswaran said that India has been in the process of repairing and improving its financial system, and balance sheet since the last decade. is out. Strengthening in corporate as well as banking and financial sector.

“While we are certainly focused on the near-term concerns and challenges. We need to understand that the medium term fundamentals of the Indian economy remain solid and the Indian economy is in a better position than many others in this world to meet the challenges that we are currently facing. Huh. The Economic Affairs (DEA) will mark the Azadi Ka Amrit Mahotsav celebrations of the Ministries of Finance and Corporate Affairs this week.

“Some of the structural reforms that the government under Prime Minister Shri Narendra Modi facilitated by the Hon’ble Union Finance Minister over the past several years, such as the Goods and Services Tax, the Insolvency and Bankruptcy Code, etc., may be temporary. External developments such as That pandemic and now overseeing geopolitical conflict,” the CEA remarked.

“However, once these clouds dissipate, they will begin to reveal their benefits and advantages in driving India’s potential growth in the coming decades. This is why India is now estimated to be Rs 5 trillion by the IMF by 26-27. It is projected to surpass the US dollar. And if the country’s dollar GDP doubles every seven years, we will have a $20 trillion GDP by 2040, with a per capita income of close to $15,000.”

Finance Minister Nirmala Sitharaman, referring to CEA’s remarks about the prospects of the Indian economy to grow to $20 trillion by 2040, said that it is the result of coherent projects and working together of the Center and the states and the existence of such a department Which focuses only on the economy, DEA.

Comparing 2013-14 to the 1991 crisis, Ms Sitharaman said the economy had to come out of serious challenges on both occasions by removing deadwood.

“But even after taking out the economy, removing all the underground, you still had challenges. And in a way, three big steps were taken by those who didn’t know at all about the coming COVID pandemic, be it reducing corporate tax, digitizing and formalizing the economy, and also bringing in IBC and GST. Yes, where all the kingdoms came. Onboard… the heavy lifting prepared us for a situation that no one could have imagined,” he said.

Referring to the externally aided projects and their impact for the people on the ground, the minister said: “We are at a stage that Japan once used to take a lot of aid and build its economy, but equally for construction. The economy of others. Today India is there.”

He said that India is contributing in helping to develop Africa and island countries facing the challenges of climate change and this shows how responsibly the government wants to use every rupee collected as tax. Is.