The continued monetary tightening without any movement on structural reforms to address supply side bottlenecks will have an added impact on capacity creation and expansion.

While inflationary pressures are primarily driven by global factors and domestic fiscal situation is also tight, this presents an opportune time for the Government to move forward on structural reforms in agriculture, land and FDI, he added.

The Government could identify 100 mega projects and put them on fast track to improve the investment momentum in the economy which would help improve sentiments as well, Mr. Banerjee suggested.