According to the Economic Advisory Council to the Prime Minister (EAC-PM), a 8% growth rate of gross domestic product (GDP) is achievable for the Indian economy, after the Economic Survey 2019 estimated that India will have to grow at an average of 8% per annum till 2025 to achieve the goal of becoming a $5 trillion economy.
The Chairman of the Economic Advisory Council to the Prime Minister (EAC-PM), Bibek Debroy said that the Economic Survey’s emphasis is on fiscal consolidation and fiscal discipline and investments, especially private investments, as the growth driver. In the last five years, India’s average rate of real GDP growth has been 7.5 % and Survey’s projections are that, to become a $ 5 trillion economy by 2024-25, with an annual rate of inflation of 4%, real GDP growth will have to be 8%.
N Srinivasan, Vice Chairman & Managing Director, India Cements, spoke about the various aspects of the Budget emphasizing that the growth- oriented Budget has sought to achieve a big transformation in the economy with a thrust on investment and job creation.
He said that the Budget, presented by Finance Minister Nirmala Sitharaman, has sought to fulfil the great expectations and aspirations of the people of India from the government in the second term.
I feel we all should support the true intentions of the government to take the country forward, develop a new India and become a $3-trillion economy this year and a $5-trillion economy in the next few years as envisaged in the Budget.
In my view, the Budget has tried to address the stress in the economy and challenges being faced on the macro economic front. The Finance Minister must be congratulated for not resorting to populist measures.
The Budget has laid out a clear roadmap to stimulate investment-led growth and pursue the development agenda of the government more vigorously through a host of measures.
Given the huge capex of ₹1.5 to ₹1.6 lakh crore per annum required by railways, the Budget has proposed to use public-private partnership model to unleash faster development and completion of tracks, rolling stock manufacturing and delivery of passenger freight services.
The Budget has continued the government’s thrust on strengthening physical connectivity via Prime Minister’s Gram Sadhak Yojana, industrial corridors, dedicated freight corridors, Bharatmala, Sagarmala and Jal Marg Vikas (inland waterways) and Udayan Schemes. For PMGSY-III, ₹80,250 crore is envisaged for upgrading 1.25 lakh-km road length over the next five years.
In the past three years, in terms of returns, ET Cement Index (covers key cement companies) and ET Construction Index (covers prominent construction companies) have been unable to beat the benchmark index Nifty by a wide margin. A key cause for this has been valuation of these companies. But now, with the broad market fall, the valuation of select cement and construction companies seemed to be in the fair range.
To boost further sentiment in these counters is the proposed investments in the infrastructure segment by the government in the Union Budget.
According to an official, LafargeHolcim-controlled Ambuja Cement is looking to acquire capacities in ready-mix concrete (RMC) and aggregates businesses to fuel growth through Inorganic expansion. The company is also on the look out for adding cement capacities, if the valuations serve right
According to a senior government official, the Ministry of Corporate Affairs will soon be changing the rules on the reporting of corporate social responsibility (CSR) activities by companies
The government will demand details of the CSR activity and what was achieved, among other things. However, the rules will be relaxed for companies with a smaller legal CSR obligation, the official said.
Steel Minister Dharmendra Pradhan has urged the employees of his ministry and steel PSUs to contribute to efforts for making India a USD 5 trillion economy. He has highlighted the importance of the steel sector in the economy and its major role in the growth story.
Stressing upon the importance of the steel industry, Pradhan said it is the backbone of the economy impacting almost every sector of the country including infrastructure, construction, automobile, petroleum, power coal, and manufacturing.
Pradhan is confident that the targets envisioned in the National Steel Policy 2017 will take Indian Steel Industry to newer pinnacles.
India has set an ambitious target of ramping up its steel making capacity to 300 million tonnes by 2030-31.