New Delhi: Chief Economic Advisor K V Subramanian on Wednesday called upon the industry to start making investments, stressing that the fundamentals of the economy are "very very strong".
On more than Rs 40,000 crore of dues pending to small companies, he nudged large corporates to ensure timely payment to the MSME sector as small players are dependent on cash flows.
Large companies must play a critical role in clearing cash dues to smaller companies, he said at an event organised by industry chamber FICCI being attended by several corporates.
Finance Minister Nirmala Sitharaman on Monday had said that according to returns filed by large corporates to the Corporate Affairs Ministry, as much as Rs 40,000 crore was due to the MSME sector.
The CEA further said the slowdown in the economy is due to a decline in investment, which is a key driver.
Read more:Public Sector Banks had "worst phase" under Manmohan Singh, Raghuram Rajan: Sitharaman
Corporates must recognise that in slowdown labour is available cheaper and so it is the time to make investments, Subramanian said and added investment must be made from a long-term perspective.
"The government has been at its toes addressing various aspects of the economy," he said.
The CEA said the "fundamentals of the economy are very very strong...fundamentals of the economy have not changed" and it would be back on the 7-8 per cent growth path.
Earlier this month, the Reserve Bank of India sharply cut its economic growth projection for this fiscal to 6.1 per cent from 6.9 per cent earlier.
The central bank's estimates come in the wake of GDP growth sliding to a six-year low of 5 per cent in the June quarter, on a massive slowdown in consumption and private sector investments.
As against India's real growth rate of 6.8 per cent in 2018, the IMF in its latest World Economic Outlook on Tuesday projected India's growth rate at 6.1 per cent in 2019 and noted that the Indian economy is expected to pick up the next year at 7.0 per cent in 2020.
On Sunday, the World Bank in its latest edition of the South Asia Economic Focus said India's growth rate is projected to fall to 6 per cent in 2019 from 6.9 per cent of 2018.
