The brokerage firm’s chief economist Tanvee Gupta Jain pointed out that this is because the organised sector in the country has fared well during the pandemic, but growth in the unorganised sector remains sluggish.

Therefore, she said, the key will be to boost growth in the informal sector through adequate policy support by undertaking the committed capital expenditure targets as indicated in the budget; providing funding support to MSMEs; and implementing the much-needed supply-side reforms.

IN a survey conducted by the company, participants felt that the country's potential growth is 6-6.5 per cent as the digitalisation thrust is leading to higher productivity gains.

On consumer sentiment, she said though it has been inching up, none of the numbers show they are even third of a percentage closer to pre-pandemic levels, according to Indian media reports.

The company’s consumer surveys show a rise in household optimism regarding their income during the week to February 20, with 13 per cent of households believing their current income is higher than last year's. This proportion was in single digits for the 21 months between April 2020 and December2021.

The proportion is still much lower than the 30 per cent registered during the pre-pandemic period, suggesting there is still a long way to go despite the improvement, Jain said.

Similarly, in February, only 9 per cent of households believed this was a better time to buy consumer durables compared to a year ago. This compares with 2 per cent households considering it a good time to buy consumer durables in April 2020 and 27 per cent in the pre-pandemic period.

Rising consumer sentiment is a crucial turning point indicator in economic growth, as a sustained increase in consumption demand will be key to incentivise the private sector to invest, given that capacity utilisation remains low, she noted.

Therefore, the policy focus should be to nurture consumer spending so it does not slip again, she added.

Fibre2Fashion News Desk (DS)