At the 92nd Annual Convention of FICCI, IMF Chief Economist Gita Gopinath said that India needs to keep its fiscal deficit target, which would require expenditure rationalisation and increased revenue mobilisation.
She also said that in the past few quarters, there has been a steep slowdown in private sector demand, which consequently has led to a weakness in investment. She was also worried about the prolonged weakness in investment, which according to her will affect potential growth. She stressed this at the special plenary moderated by Harsh Pati Singhania, former president of FICCI.
With tax revenue slowing in a sputtering economy, some states had on Wednesday suggested Finance Minister Nirmala Sitharaman to go for fiscal expansion and relax the deficit target to 4 per cent of the gross domestic product (GDP).
Gopinath said that another set of big reforms are required to get manufacturing on the ground and for India to have bigger presence on the export front.
"There are important reforms needed with respect to land acquisition and labour laws as well," she said.
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