The GDP decline is temporary and India will resume its high growth trajectory supported by a series of reforms and other measures, said Chief Economic Advisor KV Subramanian on Tuesday.
“The GDP fall in Q1 was due to the intensity of the lockdown. This pandemic will go away soon. The combination of Indian’s entrepreneurs’ abilities and various reforms initiated by the government will unleash the growth wave again. We have done it in the past and we will do it again,” he said in a virtual address at CII Connect 2020.
Highlighting a similar low growth phase during 2000-01 on account of the Asian economic crisis, he said India responded with three key moves then — fiscal spending (particularly the infra push of Golden Quadrilateral project), unleashing of reforms and disinvestment.
“The above measures helped the country achieve 8 per cent plus economic growth in the following five years. Similarly, the government is now boosting infra spend, focussing export growth through measures such as PLI scheme and a series of reforms in agriculture, commodities and MSMEs, among others. There are three labour bills tabled in Parliament. These measures will collectively drive high economic growth in the coming years,” he added.
Global supply chain
Referring to the opportunities arising out of the rebalancing of the global supply chain due to geopolitical events, Ramesh Mangaleswaran, Senior Partner, McKinsey & Company, said India could reverse the situation of being a large importer of electronics to an exporter by playing a more significant role in the global value chain.
Calling for improvements in India’s process technology, he said the country should become the best in operational excellence — in cost, quality and delivery. “We are not there as there are some gaps that need to be addressed. We need international business development capabilities, too,” he added.
Also, there should be a strong focus on building skills needed to fulfil the requirement of the electronics hardware industry, said Mangaleswaran. The setting up of dedicated zones and specialised research parks will also help in this, he added.