New Delhi, 9 July, 2014: Commenting on the Economic Survey 2013-14 tabled in the Parliament today, Mr. Sidharth Birla, President, FICCI said “The survey presents a realistic assessment of the national economic situation. It has identified the key pain points and contains suggestions on what the government must do to engineer a turnaround in the economy. The policy direction is appreciably clear. We now wait for the Union Budget to indicate how these will translate into action on the ground.”
….In our view, growth this year could be nearer the lower end of the band indicated in the Economic Survey. The outlook for agriculture is weak due to expected sub-par monsoons. In this context, managing food inflation becomes an even higher priority; the Survey does highlight the need to have a common market for agri-commodities. Further, it is rightly pointed out that rise in MSP could have a bearing on food inflation” – Sidharth Birla
“The only effective solution to food inflation is supply side management through both higher productivity and more efficient distribution. We also need a central coordinated effort to make all arms of the government work in tandem to quell rising prices by taking swift action based on real time assessment and monitoring of price and production data. For this FICCI has made a suggestion to the government to consider setting up a Food Inflation and Response Strategy Team (FIRST) at the PMO“, said Mr. Birla.
The Survey also highlights that it is imperative to have fiscal consolidation and that the country needs a new FRBM. FICCI has always underlined the need to bring the revenue deficit to zero and focus more on productive expenditure. The Survey mentions that subsidy reforms are essential.
“We would look for specific proposals in the Union Budget on further subsidy rationalisation“, said Mr. Birla.
“FICCI has mentioned that we need to review the Direct Tax Code with a focus on widening the tax base, simplification of laws and rationalising exemptions. Our thinking is mirrored in the Survey that also calls for a clean and modern replacement of existing tax laws“, added Mr. Birla.
High and rising NPAs in the banking sector has been highlighted as a matter of concern. “On this FICCI has made a representation to government to consider setting up of a National Asset Management Company (NAMCO) that can take over stressed assets, especially in the infrastructure segment, of the banking sector so that banks can free up capital for supporting productive investments” said Mr Birla.
The Survey has also drawn attention to remove bottlenecks such as land acquisition to infrastructure development. FICCI has asked for a comprehensive review of the New Land Acquisition Act adhering to the principals of fairness and certainty. We are happy note that the government is amenable to taking a relook at the Land Act.