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India to need fiscal stimulus, faster bank recapitalisation to return to 7% growth rate: Arvind Panagariya
Sep-22-2020

Former Niti Aayog vice chairman -- Arvind Panagariya has said India will need fiscal stimulus, lower interest rates, faster bank recapitalisation and privatisation of some PSUs to return to 7 per cent growth rate. Panagariya further said the country lost nearly $125 billion in the April-June period due to the COVID-19 pandemic.

Besides, he pointed out that India's economic growth was slowing down even before COVID-19 hit the country because there was a lot of stress in the financial sector. He emphasised ‘so we need to recapitalise banks now, otherwise NPAs will rise again and it will be difficult for Indian economy to grow at 7-7.5 per cent again. So, we should not commit past mistakes’.

Talking about the farm sector, he said agriculture is important for India because too many people are dependent on it. But, he added agriculture cannot grow more than 4 per cent. So India needs more growth in services and manufacturing sector. India's economy suffered its worst slump on record in April-June, with the gross domestic product (GDP) contracting by 23.9 per cent as the coronavirus-related lockdowns weighed on the already-declining consumer demand and investment. However, agriculture grew by 3.4 per cent during the April -June quarter of the current fiscal.

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