Chief Economic Adviser (CEA) Krishnamurthy Subramanian's first economic survey expects gross domestic product (GDP) growth at seven percent in FY20 . It also sees the capex cycle to pick up on an accommodative monetary policy committee.

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Arvind Virmani, chairman of Foundation for Economic Growth and Welfare and Upasna Bhardwaj, senior economist at Kotak Mahindra Bank, shared their views and outlook with CNBC-TV18.

“I have never put too much emphasis on the quarterly data. The broad picture, which is supported by the quarterly data, is that the growth has been declining. When I look at the long-term trends from 2011-12, there is a clear danger that we are falling from a growth rate of roughly 7.5 percent plus/minus which we have had for 15 years down to 7 percent plus/minus,” Virmani said.

“As far as the short-term is concerned, the positive effects of the insolvency and bankruptcy code (IBC) and goods and services tax (GST) hopefully will emerge but in my view that is not enough to put us firmly back onto that 7.5 percent level. Economic survey seems to suggest that there is a recognition of this kind of basic point,” he added.

When asked if the growth has been troughed out, Bhardwaj said: “I still have to see the growth troughing out. I don’t believe that we have already hit the bottom. If you look at some of the high frequency data, we are continuing to see worsening of the data prints and that does not provide me any comfort that we have troughed out. For one or two more quarters, we would continue to see tepid growth, maybe further slowdown from the existing levels and that is when we could have possibly seen some kind of a troughing out but that is too early to say because some of the issues which have been plaguing the system are yet to be resolved,” she noted.

"The survey has emphasised the fact that the investment growth seems to have troughed out but one needs to recognise that there is a major issue of the credit lines not being available to the SME segments, the non-banking financial companies issue that is still plaguing the system and all of that is still continuing to pose risk to growth," she further added.

First Published:Jul 4, 2019 3:18 PM IST