New Delhi, May 29 (PTI) It is incremental reforms by the Modi government since June 2014 that are paying off and continuation of such is a must to sustain India's growth at full potential of about 8.5 per cent, former chief economic advisor (CEA) Arvind Virmani has said.
"Perhaps things became a little more positive in the second half of 2015. Incremental reforms undertaken since June 2014 are beginning to have an effect on the economy... Policy reforms need to continue to sustain growth at economy's full potential of about 8.5 per cent," Virmani has told PTI.
Virmani, who served as India's representative to the International Monetary Fund(IMF), expects growth to spread to agri-rural and corporate sectors for the overall growth to accelerate by about 0.5 per cent in 2016-17 above that of 2015-16.
He is optimistic that corporate growth will pick up because of an improved fiscal-monetary mix and shift in govt expenditure to infrastructure investment from consumption subsidies and a likely stronger demand from the rural sector post-monsoon. Indian economy is estimated to have grown at 7.6 per cent in 2015-16.
The Finance Ministry has projected Indian economy to expand at 7-7.75 per cent in the current fiscal, which at the upper end is higher than last fiscal's. Two successive years of sub-par monsoon have had a significant impact on the output of both food as well as non-food crops.