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Govt should relax fiscal deficit targets, boost expenditure: Assocham

The chamber also wrote to RBI and MPC to cut interest rates at least by 25 basis points, given the challenges faced by the economy which needs immediate measures for revival of growth

ANI  |  New Delhi 

Image via Shutterstock
Image via Shutterstock

Amidst concerns over slowdown in growth due to the transient disruptions in the following the implementation of the Goods and Services (GST)and the remaining over-hang of demonetisation, Inc is looking up to the to take a few 'out of ordinary' steps like relaxation of the targets and increase in public spending to boost -led growth that would lead to more jobs and revival in consumer demand, the said in its recommendations to the

Ahead of the credit policy review on October 4, the chamber also wrote to the Reserve of (RBI) and the to cut the at least by 25 basis points, given the challenges being faced by the which needs immediate measures for revival of growth.

"At least 50 basis points elbow room can be taken with regard to 3.2 per cent for the current year and the next financial year. The fiscal targets can be taken to 3.7 per cent, but with a strict oversight over quality of so that the extra resources are wisely spent in building and reviving in sectors like roads, power, railways, ports," said D S Rawat, Secretary General.

Further, Rawat said the situation requires immediate intervention of the so that any disruptive impact of the is minimised. In view of the difficulties being faced by the small and medium-sized in filing of returns, ways must be found to reduce the compliance cost for the trade, which, he said, can be deliberated at the forthcoming meeting of the Council.

In its letter to Governor Dr Urjit Patel, the Secretary General said the "is facing multiple challenges as growth is slowing down and is not picking up. Consumers have cut down on spending and businesses have also lost momentum."

Stressing that the is still over-valued, the chamber said "effective of has appreciated against trading partners. This has an adverse impact on exports .should be persuaded to target the real effective more effectively".

Besides, the problems being faced by the exporters arising out of implementation should be addressed to without loss of time.

"Exports picked up in August and we need to maintain and build the momentum," the chamber said.

First Published: Sun, October 01 2017. 15:50 IST
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