Steps to create demand must: PHDCCI chief

Tribune News Service
New Delhi, November 7

At a time when high frequency economic and business indicators have turned positive in recent months, the industry has suggested demand creation measures to sustain this growth trajectory.

Demand creation along with increased spending on infrastructure will have a multiplier effect on the economic growth trajectory by boosting private investments, creating new employment opportunities in the country and generating demand for commodities such as steel, cement and power, said Sanjay Aggarwal, president of the PHD Chamber of Commerce and Industry.

To give a fillip to the economy, the planned Rs 111 lakh-crore National Infrastructure Pipeline could be financed through borrowings from overseas markets by the issuance of overseas bonds through a special purpose vehicle, he suggested.

Diversification in government borrowings will significantly reduce the dependency on the domestic market, leaving more room for the private sector to raise capital for investment. Overseas borrowing at this juncture is a feasible option also because India has significantly better external debt to GDP ratio at 20.6 per cent.

While appreciating the reforms undertaken by the government during the last seven months, Aggarwal referred to IMF’s recent growth estimates to suggest that India will figure among the top 10 major economies from 2021 to 2025.

Recently, a PHDCCI study estimated that the GDP growth will be around (-) 7.9 per cent for the current fiscal as compared with the median forecasts of (-) 9.3 per cent by other forecasting organisations.