NEW DELHI: Reforms designed to address structural problems in India’s economy can enhance growth rates by a per cent, according to the Economic Advisory Council to the Prime Minister (EAC-PM).
“India’s growth is expected to be in the 7-7.5 per cent range in the next few years; one of the fastest in the world. However, with reforms designated to address structural problems, growth rates can easily be enhanced by at least 1 per cent,” an official statement said after the EAC-PM met to take stock of the state of the economy.
Amongst the challenges that need to be addressed are reforms in the agricultural sector, the MSME sector, skill development, credit issues, digital payments and banking sector reforms, the EAC-PM said.
The EAC-PM discussed agricultural problems, investment trends, fiscal consolidation, interest rate management and credit and financial market issues. “The council felt that the exchange rate management of the rupee by the RBI has been sound despite the volatility in the price of crude oil. The good news is that oil intensity (use of fossil fuels as a percentage of GDP) is showing a declining trend,” the statement added.
There are indications that financial savings have started going up and there is a credit uptick through private banks in the services sector. The reforms in the financial sector should be strengthened further, building upon what the Government is already doing, the EAC-PM said.