Indian Economy on the Path to Recovery: Ajay Seth, Economic Affairs Secretary

Numerous strategic reforms were announced even during the pandemic to aid the economic growth

October 5, 2021

The government's focus continues to be on inclusive development

The introduction of the Insolvency and Bankruptcy Code has led to the resolution of stressed assets worth Rs. 2.4 lakh crore

National Infrastructure Pipeline and the National Monetization Plan have been announced to aid the infrastructure sector

The infrastructure spending must be doubled

Addressing an event organized by FICCI, a non-governmental trade association and advocacy group, Economic Affairs Secretary Ajay Seth said that the Indian economy is on the path to recovery. However, he accepted that credit growth is still slow. Over the past 18 months, the focus of the government was not just to manage the pandemic – a health crisis that had an adverse impact on the financial sector – but also to step up on reforms so the economy would have a rapid growth rate and the potential growth rate can also be developed. He also stated that due to a dearth of private investment demand, the credit off-take has been moderate.

Mr. Seth also said that the government has launched various schemes over the last seven years such as the PM KISAN Yojna, PM Awas Yojana, Jal Jeevan Mission, and electricity for all among others to promote inclusive development. These schemes have been directed to support entities and individuals with weak economic resources. He added that even during the lockdown period many significant reforms were unveiled by the government, which helped in the economic recovery.

The introduction of the Insolvency and Bankruptcy Code has led to the resolution of INR 2.4 lakh crore of stressed assets, while FDI and FPI liberalization has reinforced the confidence of foreign investors. In addition, the National Infrastructure Pipeline worth INR 111 lakh crore of investment, supplemented by the National Monetization Plan to the extent of approximately INR 6 lakh crore, has been announced. These schemes along with the Gatishakti vision of the Prime Minister would result in the smooth movement of goods and services and create employment opportunities. In his Independence Day speech on 15 August 2021, the Prime Minister detailed the PM Gatishakti Plan for an integrated infrastructure growth that will reduce logistics costs and make the economy competitive.  

The current infrastructure spending is approximately 5-6% of the GDP. This should be doubled, and it is only possible through cooperation between industry and the government.