KOLKATA: Indian economy is recovering faster than expected and the government will spend on building infrastructure rather than boosting consumer demand artificially, principal economic advisor to the finance ministry Sanjeev Sanyal said on Tuesday.
Speaking at a webinar organised by the Bharat Chamber of Commerce, he said the country needs to keep the growth momentum and it is the only means to create employment and reduce poverty.
"We are recovering much faster than expected and need to keep the growth momentum in the next two years. The government will make capital expenditure on infrastructure to create assets rather than boosting consumer demand artificially."
"If we need to reduce poverty, the growth has to keep going. Else, we will end up in redistributing poverty as had happened in West Bengal where I come from," Sanyal said.
After contracting for two quarters in a row, the country's economy grew by 0.4 per cent in the October-December quarter of the current fiscal amid the coronavirus pandemic.
The gross domestic product (GDP) had expanded by 3.3 per cent in the corresponding period of 2019-20, the data released by the National Statistical Office (NSO) showed.
The economy had shrunk by an unprecedented 24.4 per cent in the first quarter this fiscal following the coronavirus pandemic and resultant lockdowns.
In the second quarter, the GDP declined by 7.3 per cent amid a perk up in economic activities after the easing of the lockdown.
Sanyal said the nominal GDP growth rate in the Union Budget for 2021-22 was projected at around 14 per cent, which is a "conservative estimate".
The noted economist said the government is "unapologetic" about the privatisation of some public sector entities.
"We are unapologetic about the privatisation of some areas. PSUs will exist where it is needed but not where the private sector can do a better job," he said.
There is a need to unleash the spirit of the private sector, the principal economic advisor said.
"We will get rid of regulations but will support sectors which needed by extending the PLI (production linked incentive) schemes," he said.