India Inc hopes government ensures economic growth and fund flow

A decisive mandate for the National Democratic Alliance (NDA) on Thursday has expected a higher pace of economic reforms. This is a day after the United Nations (UN) lowered its FY20 gross domestic product (GDP) growth forecast for India, corporate leaders said a stable government at the Centre could help boost infrastructure spend, address agricultural distress, and encouraging employment.

The UN World Economic Situation and Prospects report, released on Wednesday, said India was in sync with the global trend in terms of a broad-based economic slowdown, led by lower consumption demand, industrial production and exports. The trend prompted the UN to drop its FY20 GDP growth forecast (for India) to 7.1 per cent from 7.5 per cent. Consumer-facing businesses in categories such as staples and discretionary are already seeing their slowest growth in six quarters, thus impacting earnings.

Focus will now be on steps taken by the government to encourage investment and stable economic policies after the BJP’s strong showing in the Lok Sabha elections.

India Inc on Thursday expressed hope that a stable government at the centre would boost growth in the country and lead to higher foreign fund inflows as trends pointed to BJP and allies returning to power with a roaring majority.

Veteran industrialist and Godrej Group Chairman Adi Godrej said the new government is expected to see that the India’s gross domestic product (GDP) growth improves.

He felt that the first step is to tackle corporate tax. India’s corporate tax rates are among the highest in the world and that needs to be brought down. The government here had promised that corporate tax would be dropped down to 25 percent.

Godrej said they have done it for smaller companies but they haven’t done it for larger companies. He feels that is a very important move and there will be many other moves that could help revive growth.

Former Vice Chairman NITI Aayog Arvind Panagariya had similar concerns. He felt it was time for bold reforms that could wholly transform the country. He added the government should create a healthy ecosystem for business and entrepreneurs who take responsibility to create high-productivity jobs.

With Modi as India’s PM for the second time in a row, India’s economic policies must be view very intently.

BSE Member Ramesh Damani said he expects more foreign fund inflow into India in the future. He added that the deals that were stuck in the past six months because of the elections are more likely to happen now so that itself will attract a lot of FDI. He feels there will be some buoyancy in terms of foreign flow into India, given how this election has panned out.

Surendra Hiranandani, Founder and Director at House of Hiranandani, said he believes a stable government at the centre will further boost the growth in the real estate sector.

He hopes the new government demonstrates concrete action to push investments, increase growth and generate employment.