India needs to press the pedal on structural reforms to reach the goal of $ 5 Trillion economy: Dr. K V Subramanian


New Delhi: 29-11-2019: SKOCH Group (India’s topmost think-tank) organized the nation’s first of its kind economic dialogue to discuss, debate and recommend to the government on achieving short-term to medium-term growth goalsNoted economists and economy think-tanks reached a consensus on the GDP growth estimate at 6-6.5 percent for the next fiscal at SKOCH India Economic Forum and that acceleration on series of structural reforms including simplification of GST, direct tax code, access of credit to MSMEs, enhancing money supply and monetization of assets and innovation, are needed to reverse the slowdown in economic growth and achieve the $5 trillion GDP target.

In his presentation on 'Outlook of the Indian Economy' at the India Economic Forum, Mr. Sameer Kochhar said the real GDP growth in the second quarter is likely to fall further to 4.5 percent and uptake is expected only from the fourth quarter. Around 500 delegates, including top economists, policymakers and industry leaders are participating in the India Economic Forum organized by SKOCH Group.

“In the current fiscal the number is going to be around 5 percent. But for 2020-21 at least 7 percent of growth is assured. So it's not all gloom and doom. If the structural reform measures are taken, growth will jump in the coming years. The external environment is not very kind and hence structural reforms are critical to do anything higher than that,” he said, added that to achieve $5 trillion GDP target by 2024-25, compound annual growth of over 10 percent would be needed. A lot needs to be done in terms of tax reforms. The GST chain seems to be quite broken. Some of these are expected to happen through the GST Council and some in the next budget.” said Kochhar while addressing the inaugural session of the Forum.


Mr. K V Subramanian, Chief Economic Adviser, Government of India; Mr. Arvind Virmani, Senior Economist and Former Chief Economic Adviser, and Mr. Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, Bharatiya Janata Party participated in the discussions.

Dr. K V Subramanian, Chief Economic Advisor, Government of India in his address at the forum said, We need to press the pedal on structural reforms to reach the goal of $ 5 Trillion economy. We laid down the blueprint of the $ 5 Trillion economy with special emphasis on investment with consumption being the force multiplier. India's economy grew at 5 percent in the first quarter of 2019-20, this is the slowest pace in over six years. It is an investment that is most important for growth. For continuous investment flow taxes become critical, investors evaluate risk and returns after taxes. The government recognizes the need to cut the corporate tax to boost investment. Some reforms have been done in the last few years which would have salutary effects such as the changes in the Bankruptcy Code. Security and Exchange Board of India has directed that any default on the loans need to be revealed to the exchange, which will bring a lot of corrections in the system and curb the spooks caused by asymmetric information.”    

Dr. V Anantha Nageswaran, Part-Time Member, Economic Advisory Council to the Prime Minister in his keynote said, “If you look at the general tendency and the marginal tendency the slowdown is primarily the result of the monetary dynamics of the country which is very weak.  Some extraordinary measures do need to be taken. We need to create a liquidity window for NBFC, the way RBI has done in the past. The fiscal window needs to be created.”  


Speaking at the forum Mr. Gopal Krishna Agarwal, National Spokesperson – Economic Affairs, Bharatiya Janata Party said, “GDP growth rate has been slowed down and the government is not denying this. GST has to be improved at the compliance level. The biggest hindrances our industries have are in logical support, which needs big improvement.”