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The suggestions come against the backdrop of GDP growth hitting a three-year low of 5.7 per cent in the June quarter.
Notably, Finance Minister Arun Jaitley has already indicated that government was working on additional measures to bolster economy and an announcement would be made after consulting Prime Minister Narendra Modi.
The Confederation of Indian Industry (CII) in a statement has also suggested interventions for the depreciating rupee that would increase export-related jobs.
She noted that certain segments like automotive sector and personal loans are "positive" for the economy.
Putting forth the rationale behind its demand "for an interest rate cut of 100 basis points", the CII said it would encourage domestic demand in sectors such as affordable housing, consumer durables and construction.
The RBI is slated to announce its next round of bi- monthly monetary policy on October 4.
Furthermore, interest rate subvention in certain sectors such as exports, housing and MSME would also help raise growth.
The chamber further said "there may be need to relax the fiscal deficit targets" to accommodate stimulus measures, particularly for job-creating sectors.
The FRBM Act permits a deviation of 0.5 per cent of GDP on account of exceptional circumstances.
Two years ago, India was touted as a rare bright spot in a gloomy global economy, with GDP growth outpacing a slowing China.
But since early 2016, GDP growth has fallen for six consecutive quarters, slumping to a three-year low of 5.7 per cent in April-June quarter, making India loose the fastest growing economy tag to China for the second straight quarter.
CII further said there is also urgency regarding reforms in the labour regulations.
Fixed term employment and fiscal incentives for creation of incremental jobs would help new employment generation, it said.
In the longer term, the chamber said it is important to simplify and address labour laws for creating better quality jobs.