Economic turnaround in Q1 itself: Panagariya

Seeking to allay fears of a slowdown, NITI Ayog vice chairman Arvind Pangariya on Friday said that the economy would turnaround during the April-June quarter itself and India could be back on the 8% growth track by 2019.

Addressing a press conference here, Pangariya said the impact of demonetisation was wearing off and improvement in cash supply would lift overall economic activity in the ongoing quarter itself.

“We are pretty much out of the woods as far as demonetisation is concerned. We should see a good turnaround in Q1,” he said days after the GDP data showed that the economy had slowed down to 6.1% in the January-March quarter.

The data released by the Central Statistical Organisation showed that the annual growth had slowed down to 7.1% in 2016-17 from 8% the previous year. The government had blamed the slowdown on poor performance of manufacturing and services sectors.

Pangariya expressed confidece that the growth in the fiscal year 2017-18 would accelerate to 7.5% and would top the 8% mark in 2018-19.

“Before the present term of the government ends, I would expect that we would hit the 8% mark and probably enter another trajectory of sustained growth at 8% plus,” he said.

On reports of sale of stake in Air India, Pangariya said the government has to first decide on a complete or partial write-off of the Rs 52,000 crore debt burden of the national carrier.

Pangariya said the last he had heard that Air India's debt burden was Rs 52,000 crore. “That's a very large number... selling it (Air India) with the existing debt is going to be very very difficult even say, it is open to both domestic and foreign buyers,” he said.

He also sought to dismiss fears of large-scale job losses in the IT sector. “I have seen statements from Nasscom which say that in the last three years, the Indian IT sector has in fact added six lakh jobs. And Nasscom estimates that 25-30 lakh new jobs will be created in the next eight years. Fears of automation eating up jobs are exaggerated,”Panagariya said.

The vice-chairman was of the opinion that the debate over job losses was taking place in a vacuum due to lack of credible data on jobs creation. Panagariya said the National Sample Survey Organisation has begun the first ever household employment survey to gather reliable data on jobs.