New Delhi: Commenting on the key trends highlighted in the Economic Survey 2021-22, which was tabled earlier on Monday in the Parliament, FICCI's President Sanjiv Mehta said, "India's unique response strategy to the COVID-19 pandemic backed by accelerated vaccination drive and supportive measures by the government and Reserve Bank of India (RBI) has helped the economy recover to pre-pandemic levels. As per the Economic Survey, India is expected to see a further momentum in economic recovery, with GDP growth projected at 8.0 – 8.5 per cent for 2022-23. While this is encouraging, we need to be mindful of the fact that some of the assumptions that underpin this projection could turn out to be more complex and limit the growth projection towards the lower end of the band. The evolving geopolitical developments and their impact on oil prices, the likely accelerated pace of monetary policy normalisation by central banks and the still uncertain trajectory of the COVID-19 pandemic could throw up newer challenges for the economy in the year ahead."

"It is therefore important that the upcoming Union Budget outlines measures that would aid the recovery process by improving demand and enhancing CAPEX on infrastructure. FICCI has made specific suggestions for spurring demand and investment in the economy, which in turn would lead to greater job creation. We need to move to a virtuous cycle of growth where sustained demand leads to higher consumption, the consequent higher capacity utilisation leads to capital investments which in turn leads to job creation and more demand," added Mehta.

As part of its pre-budget suggestions to the government, FICCI has suggested that this is not the time to focus on fiscal consolidation. Higher government expenditure, particularly on the infrastructure side, will have to lead the way in supporting growth. We also need measures that would offer relief to the poor and vulnerable sections of society both in the rural and urban areas. Extension of 'Pradhan Mantri Garib Kalyan Yojana,' extension of the Emergency Credit Line Guarantee Scheme for MSMEs, an Urban Employment Guarantee program are some of the suggestions we would like to see getting incorporated in the Union Budget.

"Besides measures that would aid recovery and offer relief, the government should also continue with its reforms program. The objective of making India a much larger economy can only be met if we pursue market-oriented reforms and continue on the path of liberalisation. Sectors like healthcare and education have seen a series of forward-looking policies, but more steps are needed to draw in private investments in these areas. Likewise, in the manufacturing sector, we have the PLI scheme that is fast catalysing investments across the identified champion sectors. However, successful implementation of the projects calls for a review of the duty structures on inputs, especially those that do not have a large production capacity in India. We also need to double up our efforts in engaging with other large markets that offer complementary strengths. In this context, the budget should offer insights on the way forward for FTAs under negotiation and how we can sustain and improve the high rate of growth in exports," said Mehta.