India's economy is likely to grow by 6.5 per cent in the current and the next financial year, an EY report said, attributing lower than anticipated expansion in the September quarter to fall in private consumption expenditure and gross fixed capital formation. Real GDP growth eased to a seven-quarter low of 5.4 per cent in July-September -- the second quarter of the current 2024-25 fiscal year.
The Indian economy has "some bright spots and a number of very dark stains" and the government should target its spending "carefully" so that there are no huge deficits, noted economist and former RBI Governor Raghuram Rajan said on Sunday. Known for his frank views, Rajan also said the government needs to do more to prevent a K-shaped recovery of the economy hit by the coronavirus pandemic. Generally, a K-shaped recovery will reflect a situation where technology and large capital firms recover at a far faster rate than small businesses and industries that have been significantly impacted by the pandemic.
'But can it afford to present a scenario within the existing legal framework of fiscal consolidation?', asks A K Bhattacharya.
'We get an overzealous army of tax inspectors pushing the economy too hard,' says Ajay Shah.
'In a serious fiscal situation like this, an ostrich-like focus on annual budgeting, event management and defensive rhetoric will only make matters worse,' warns Rathin Roy.
The panel may include or seek inputs from former RBI Governor Urjit Patel, former chief economic advisor Arvind Subramanian, Sajjid Chinoy of the PM-EAC, Rathin Roy, among others.
Tamal Bandyopadhyay offers some unsolicited advice for a government wh,ich came to power, with brute majority and the nation's pragmatic chief money man.
Besides advancing the presentation of the Budget to perhaps the first week of January, , there are four new initiatives that could be rolled out from the next Budget, says A K Bhattacharya.
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