New Delhi, Jan 20: Surging inflation and slowing growth are raising serious concerns about the future growth prospects of the economy and as a remedial measure the government should resolve supply-side hurdles and ensure more stringent governance norms, a report said on Monday.
According to the Dun and Bradstreet Economy forecast, even though the Index of Industrial Production (IIP) turned positive in November 2019, it is likely to remain subdued.
"Slowdown in consumption and investment along with high inflationary pressures, geopolitical issues and uncertainty over the recovery of the economic growth are likely to keep IIP subdued," the report noted.
Dun and Bradstreet expect IIP to remain around 1.5-2.0 percent during December 2019.
As per government data, industrial output grew 1.8 percent in November, turning positive after three months of contraction, on account of growth in the manufacturing sector.
On the price front, uneven rainfall along with floods in many states and geopolitical issues have led to a surge in headline inflation even as demand remains muted.
The Consumer Price Index (CPI) in December rose to about five-and-half year high of 7.35 percent from 5.54 percent in November, mainly driven by high vegetable prices.
"The sharp rise in inflation has constrained monetary policy stimulus while revenue shortfall has placed limits on the government expenditure," Dun & Bradstreet India Chief Economist Arun Singh said.
According to Singh, growth-supporting measures and deceleration in growth are likely to cause slippage in fiscal deficit target by a wider margin.
"The government should focus on taking small steps to address the slowdown; in particular, resolve the supply-side hurdles and ensure more stringent governance norms," Singh said.
Unless these concerns are addressed through a comprehensive policy framework, it will not be easy for India to clock a sustainable growth rate to become a USD 5 trillion economy, he added.
Comments
This is be best example of how politicians react only when the media highlights them. There are so many issues within our country, where we require political rulers to put their effort and attention in solving day-to-day issues of people. Do something before things go wrong. May be we can start with railways and airlines.
Alternate News: "Imran Khan seeks report into kidnapping of 2 muslim girls in India's state of Uttar Pradesh"
first look into your house ...
dont need drama...bring back our lost glory to india...you defeated marons
Add new comment