Montek Singh Ahluwalia, Deputy Chairman of the Planning Commission on Saturday stressed that the new Government should focus on rapid implementation of goods and services tax (GST) and reduction in fiscal deficit will help the country achieve 7-7.5 per cent growth.
"The first year of the new government will be its honeymoon period. And after a year, they will have to take the policy decisions. If they do the right thing, we will be back on the growth path. Though achieving 8 per cent may be difficult, 7-7.5 per cent is not," Ahluwalia said on the sidelines of India Economic Outlook Conclave.
Emphasising on the need to reduce fiscal deficit, Ahluwalia added, “Though it is the sovereign decision of every government, my advice to the new government, and certainly to our present government, is that it is certainly a big mistake to take your eyes off the fiscal deficit. We have been reducing it and we should continue to do so.” He further said that though investments have reduced from 35 per cent to 32 per cent, even in that scenario the country will be able to achieve its targets.
He further added, rapid implementation of GST is the systematic reform that can be brought by the new government. “I think, in these areas, there has been narrowing of differences, but now we will have to see how the politics unwinds,” he said. Ahluwalia said the growth of the economy will also depend on the growth of the industry as a whole.
"There has been a slowdown in construction, mining and manufacturing sectors. The manufacturing sector has to grow double digit. Also, the growth of the small and medium enterprises depends on the growth of the industry. If the industry does not grow, the SME sector, too, will not grow,” he added.