Suggesting an action plan for putting the country on a revival path, the Confederation of Indian Industry (CII) on Tuesday cautioned the government the situation would worsen if it failed to act immediately.
At its national council meeting here on Tuesday, the industry body mooted a 10-point economic revival package with specific monetary and fiscal steps, including lifting the foreign direct investment caps in the aviation, retail, defence and insurance sectors. “Industrial growth is particularly poor and corporate profits have been declining. Growth in investments is also moderating, while investor perception about India turned negative, owing to the sharp fall in the rupee. This is the time to show extraordinary leadership. This is the time for everyone, including the Opposition and states, to come together,” said CII President Adi Godrej.
Revival measures had to be initiated to revive growth through reforms and governance, Godrej told reporters after the meeting. He added it was possible to achieve a growth rate of nine per cent in 2013-14, if the country put its act together.
“There was a unanimous call for fiscal, monetary and administrative steps that could be game-changing for the Indian economy. One such step is fast-tracking implementation of the Goods and Services Tax (GST), which could add up to 1.5 per cent additional growth to the GDP (gross domestic product),” Godrej said in a statement. He also mentioned two areas the government should focus on — reducing subsidies to two per cent of the GDP and a ‘sensible containing’ of imports, particularly the import of finished products into the country, to reduce the current account deficit.
“GDP growth has come down to 5.3 per cent in the January-March quarter, the lowest in nine years. This is a matter of concern for all,” Godrej said, adding he expected the Reserve Bank of India to announce strong a monetary stimulus in the next six months, as inflationary pressures were creating headroom for such a move. He said the government should take steps to encourage exports, initiate financial sector reforms, boost the corporate debt market and remove bottlenecks in the infrastructure and agriculture sectors
On corruption, he said the government should reduce the scope for discretion and human interface in government transactions. On proposed policy actions, he said the prime minister and the finance minister had assured they would go ahead with major policy decisions.
Godrej said CII planned to organise industry delegation visits to the US, the UK and other countries to revive investor confidence in India.