India's growth story intact despite challenges, says Ficci

New Delhi: India's growth story remains intact with the GDP expected to grow around 7.5 per cent in the current financial year and improve further in the coming years, Ficci said on Thursday.

It termed the slowing down of the industrial output in May to 3.2% and the inching up of the retail inflation in June to 5% as short-term challenges. They are being being pro-actively tackled by the government and the RBI, it said, observing that these indicators should not be seen as hurting the signs of revival in the economy significantly.

“While the industrial output growth is expected to rebound in the next few months; the rise in inflation is being watched by the RBI closely, and the apex bank and the government will certainly take necessary measures to keep it at the manageable levels,” said Rashesh Shah, President, Ficci in a statement.

“The Goods and Services Tax (GST) will play the role of a catalyst in this. While the GST collection trends clearly indicate towards a positive sentiment in the economy, the national integrated indirect tax structure will also bring down inflation, going ahead,” he added.

According to him, with the GST Council and the central government open to taking measures for rationalising the GST rate structure, bringing in the excluded items and simplifying the tax administration, GST is all set to boost the GDP growth further.

“Equally important is the fact that GST has shown that industry, and the country on the whole, is ready for adopting big-bang reforms”, he said, adding, “there is no doubt now that larger economic reforms involving both the Centre and the states are here to stay”.

Along with this, the reform measures like Insolvency and Bankruptcy Code and Real Estate (Regulation and Development) Act, 2016, which have already started yielding good results, will help in strengthening the revival of animal spirits and take the GDP growth beyond 8 per cent, Shah said.