HOME > MARKETS > ECONOMY NEWS
  ECONOMY NEWS
ECONOMY
India can end up with real GDP growth of 5% this financial year: Bibek Debroy
Jan-27-2020

Amid the current economic slowdown, the chairman of PM's Economic Advisory Council Bibek Debroy has said that India can end up with a real Gross Domestic Product (GDP) growth of 5% this financial year (FY20) excluding the inflation rate. He added that next year, the GDP growth rate could be anything between 6-6.5%. He also said that in the present scenario achieving a 9% GDP growth will be difficult, the aspirational growth rate could be between 6.5-7%.

He said that at present, Indian economy is growing in an environment which is somewhat protectionist and has declining exports. He said the period during which the country grew at high GDP growth rates like 9%, the exports-to-GDP ratio was 20%. But now with developed countries resorting to protectionism and after the collapse of the WTO, contribution of exports to GDP in a large way does not seem possible. He further said with India being strong in services and not manufacturing, the country will have to give some to get some. It is a quid pro quo situation particularly in a regional trade bloc kind of arrangement.

Regarding taxation regime, Debroy said that the country is moving towards stable direct tax regime without any exemption. Goods and Services Tax (GST) is still work in progress. GST was supposed to be revenue neutral. But the government has lost revenue post-GST implementation, which is not tenable. He added that when both direct tax and GST rates get stabilised in future, a day might come when there would be no need to present budgets in the Parliament. On the high cost of capital, he said it will continue to be so as it is a scarce resource in India.

  RELATED NEWS >>