Growth needed for recovery will take time, infra stimulus required: Experts
Kolkata: The growth needed for recovery of the economy post the pandemic will take some time and the government should provide stimulus to the infrastructure sector of the country, experts said on Tuesday.
Speaking at a webinar organised by BCCI, Sajjid Z Chinoy, the chief Indian economist for J P Morgan said that the COVID-19 crisis has dealt a permanent shock to the people and households have reduced consumption and turned savers.
There is need for fiscal stability after COVID-19 and growth in the economy will be gradual, he said.
The private sector will recover gradually, Chinoy said adding that there is need for infrastructure stimulus.
“The infrastructure stimulus can be funded by asset sales by the government. A minimum of seven per cent growth is required for medium term growth in view of the high debt-GDP ratio of the country”, he said.
The goods sector will recover faster than the services sector which will take time.
“The main prerequisite for a good growth is to ward off the virus”, he added.
Group chief economic advisor of SBI, Soumya Kanti Ghosh said there is a need for creating a fund for the infrastructure sector.
“This fund will support the health infrastructure and capital infusion to develop financial institutions”, he said.
According to him, RBI has been able to stabilise the market through a series of policy measures and policies had been by and large discretionary in nature.