Chief Economic Advisor (CEA) KV Subramanian has said that the economy will register a 'V-shaped' growth of 11 percent in the next financial year starting in April. This will bring back the business confidence of private enterprises (animal spirits).
In the Economic Review 2020-21 presented in Parliament on Friday, it is estimated that the growth rate of the Indian economy will be 11 percent in 2021-22. However, the economy is projected to decline by 7.7 percent in the current financial year 2020-21.
When asked about the revival of 'Animal Spirits' in private investment, Subramanian said, "I think the economic growth rate in the next financial year will be 11 percent as per the estimate. In such a situation when the opportunities are seen, then the private sector will come forward. '
John Maynard Keynes, the famous economist, first used the phrase 'animal spirits'. It refers to the trust created in investors for investment. Subramanian also mentioned counter-cyclical measures to attract private investment.
He said that there is a business cycle in the economy. Sometimes it is strong and sometimes weak. In such a situation when the economy is performing quite well and the private sector also performs well, then the government has an opportunity to strengthen its fiscal position.