Meaningful reforms by government have paved way for the economy to come back on track: PHDCCI
Nov 27, 2020
New Delhi [India], November 27 : With the contraction of the Indian GDP by 7.5 per cent in July to September quarter (Q2 FY21) from 23.9 per cent contraction witnessed in April-June quarter, PHD Chamber of Commerce and Industry on Friday said meaningful reforms undertaken by the government have paved way for the economy to come back on track and it looked forward to positive growth in Q3 FY 2021.
"Meaningful reforms undertaken by the government since March 2020 is really appreciable, it paved way for the economy to come back on track," said Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry.
The Q2 GDP has contracted by 7.5 per cent due to decline in the growth rate of financial, real estate and professional services at 8.1 per cent and public administration, defence and other services at 12.2 per cent, mining and quarrying at 9.1 per cent, manufacturing at 0.6 per cent, a PHDCCI statement said.
"Going ahead, the Government's focus on demand rejuvenating measures introduced under Aatmanirbhar Bharat 3.0 will have a multiplier effect on the economic growth trajectory through enhanced demand, job creation, increased private investments, escalated exports and growth of sectors that have strong backward and forward linkages in the coming quarters," Aggarwal said.
He also appreciated several government reforms that have the "potential to push the GDP growth in the positive trajectory."
"The recent reforms announced by the government such as Production Linked Incentive Scheme for 10 champion sectors, central government's contribution of 24 per cent of EPF wages (12 per cent+12 per cent) for establishments having up to 1000 employees and 12 per cent (employee part) of EPF for establishments having more than 1000 employees for 2 years, income tax relief to developers and home buyers, among others, have potential to push the GDP growth in the positive trajectory of 0.1 per cent to 2 per cent in the Q3 FY 2020-21 and 2 per cent to 4 per cent in the Q4 FY 2020-21," he said.
He also said the recovery in the key economic and business indicators on the back of a series of stimulus announcements by the government in last eight months, totalling to around Rs 29.9 lakh crore, will go a long way in fight against the COVID-19 pandemic's impact on trade, industry and economy.
"The economic reforms undertaken by the Government have instilled expectations of a strong, sustainable and even positive growth in Q3 FY2021 with a robust resumption of the lost economic activity," Aggarwal said.
