Nascent growth signs, India must take structural reforms: Brickwork

New Delhi: Brickwork Ratings on Wednesday said there are nascent signs of economic revival and the domestic economy may see a moderate improvement in GDP in the next fiscal. Supported by government measures and if structural reforms are undertaken, FY 2021 could have a growth of 5.5% to 6%.

The government has already proposed to spend Rs 13.6 lakh crore and Rs 19.5 lakh crore in the fiscal 2019-20 and 2020-21, respectively (as part of its Rs 102 lakh crore capital expenditure in infrastructure sectors during the fiscals 2020 to 2025), which is expected to boost the infrastructure activity significantly in the next fiscal.

"If structural reforms are undertaken, FY 2021 could have a growth of 5.5% to 6%," it said. On Tuesday, the government projected 5% growth for FY20 due to subdued investment, consumption and demand.

Muted manufacturing activity hit by a slowdown in the automobile sector led the slowdown in the GDP to hit 4.55% in Q2 2019-20, the lowest in the last 26 quarters.

Though, nascent signs of recovery in some of the economic indicators are visible like a moderate rise in passenger air traffic, sales of passenger cars and improved manufacturing activity. December manufacturing PMI brought a huge respite to the otherwise gloomy industrial activity, it said.

The declining investment, stagnant exports, and rising unemployment is clearly a wakeup call for the government to fast track the reform process and provide a substantial stimulus for reviving growth momentum.