India Inc pitches for reforms as economy grows 7% in Q3

New Delhi: With the GDP growing by 7 percent in the third quarter, India Inc said the economy is getting back on track yet reforms are needed to revive investments and push demand hit by note ban.

"Growth is expected to recover in the next financial year. The direction indicated in the Union Budget announced earlier this month is encouraging and will further strengthen the domestic economy. It is extremely critical to push the domestic capex cycle which has been persistently weak," Ficci Secretary General A Didar Singh said.

"We also look forward to a further reduction in lending rates by the banks. This will help boost consumption and prop-up investments through low-cost finance," he added.

India's economy expanded by 7 percent in the third quarter of 2016-17, belying fears that note ban would have severely impacted economic activity.

The Central Statistics Office (CSO) has retained the growth projection for the current fiscal at 7.1 per cent, as projected in the first advance estimates in January.

"Policymakers should take doable steps to revive fixed investments and production of capital goods which are falling continuously since the growth which is being supported by consumption demand does not have a sustainable impact," Assocham President Sandeep Jajodia said.

The CSO has also marginally revised upwards the GDP estimates for first and second quarters to 7.2 per cent and 7.4 per cent.

It was feared that demonetisation affected in the middle of the third quarter (November 9, 2016) would have adverse bearing on various segments of the economy.

The Reserve Bank of India and other agencies like IMF and OECD had lowered GDP projections arguing that the note ban would have short term impact on the Indian economy.