According to business consultancy KPMG’s report on ‘India Soars High’ launched at the ‘Make in India Week’ here, while global economies are facing headwinds in recent years, India is moving on a higher economic growth trajectory.
“With favourable macroeconomic conditions, a prudent fiscal policy, responsible government spend and a pro-reform government, India shall continue to evolve into an even more attractive and stable investment destination,” KPMG said.
It noted that strong economic growth prospects together with the implementation of the unified tax system would increase fiscal headspace for infrastructure investment.
“This would be further strengthened by the measures to rationalise subsidy,” KPMG said.
“The savings from subsidies and higher tax revenues would enable the government to fund its capital expenditure plan while sticking to the fiscal discipline,” it said.
KPMG said the government is committed to bring the fiscal deficit to 3 per cent by 2017-18.
“Reform measures initiated by the government have underpinned India’s long term growth potential while the reduction in current account deficit on the back of falling oil prices enabled the RBI to increase foreign exchange reserves, which could act as a cushion against external shocks,” the report said.
Accordingly, it said the Indian economy is expected to become even more resilient, thus giving sufficient operational comfort to investors.