From Our Special Correspondent

Daijiworld Media Network

Bengaluru, Jun 2: The premier trade and industry body of the country, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) has hailed India’s growth story and emergence as ``the fastest growing major economy in the world.’’

With the country’s GDP expanding by 7.6 per cent, ASSOCHAM President Sunil Kanoriaon Thursday said it was time to build on the gains and bolster private investment to become a big catalyst for job creation and achieving the ultimate objective of sustainable growth.

“At 7.6%, India’s GDP growth rate for the financial year 2016-17 is at a five-year high. This is good news and firmly puts India as the world’s fastest growing major economy,’’ he said.

However, he felt the sustainability of this growth momentum will certainly depend on how well and how fast government can help revive the investment, especially in the private sector.

Kanoria, who is also the Vice Chairman of Srei Infrastructure Finance Ltd, said the government should focus on investing in the physical and social infrastructure as it did have a decisive impact on the GDP growth.

But it is the large scale private investment which would bring in vibrancy in the economy which has the potential to grow well over eight per cent within the current financial year itself.

“An all-out effort must be made by the Finance Ministry and the Reserve Bank of India to work closely with the banks to resolve the problem of the large scale non-performing assets, taking a pragmatic view of the difficult situations that the corporates across different sectors like steel , power and construction , have run into,’’ Kanoria said.

He said, once the private investment picks up, that would be reflected in the better ratio of the Gross Fixed Capital Formation (GFCF) to GDP. This ratio has been shrinking for the fourth successive year, while our GDP continues to grow.

“The success of the ‘Make in India’ initiative hinges on some key reforms. In this context, introducing the Bankruptcy Code and getting it passed by both the Houses of the Parliament is a big step forward,’’ he said pointing out that the country needs its quick implementation as that would help resuscitate a lot of stuck projects and unlock capital.

The government also needs to expedite the rolling out of the Goods and Services Tax (GST) by building political consensus. This is something which will greatly help in improving the investment climate. It would also send out a very strong signal to the foreign investors establishing this government’s pro-reform credentials,’’ said Kanoria.

“The pick-up in agricultural growth is a very positive development. Hopefully, a good monsoon this year coupled with the steps announced in the Union Budget for rural development will provide a further spurt to the rural economy,’’ he felt.

Improving the irrigation network and mechanization of agriculture should figure high on government’s agenda. At the same time, Centre must collaborate with State Governments to improve the ‘ease of doing business’ so that more entrepreneurs can be groomed. For a country like ours where almost a million gets added to the workforce every month, creation of job creators is imperative.

The ASSOCHAM President said at a time when the global demand is at a new low and risks like possible exit of Britain from the EU, known as the ‘Brexit’ and likelihood of the US Federal Reserve raising the interest rates, loom large, domestic reforms in the agriculture sector, taxation and nursing the banking sector must be accorded the highest priority.