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Relax fiscal deficit target to boost economy: CII

CII looks forward to quick growth in the GDP

Press Trust of India  |  New Delhi 

Naushad Forbes, President of Confederation of Indian Industy (CII)
Naushad Forbes, President of Confederation of Indian Industy (CII)

Increase in public spending, relaxation of target and the interest rate cut by 100 basis points are some of the measures suggested by to stimulate the slowing economy.

The suggestions come against the backdrop of growth hitting a three-year low of 5.7 per cent in the June quarter.

Notably, Finance Minister has already indicated that government was working on additional measures to bolster economy and an announcement would be made after consulting Prime Minister

The (CII) in a statement has also suggested interventions for the depreciating rupee that would increase export-related jobs.

"looks forward to quick growth in the which we expect by year-end as industry gets over the teething issues related to GST," said Shobana Kamineni, President of the industry chamber.

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 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 targets" to accommodate stimulus measures, particularly for job-creating sectors.

The FRBM Act permits a deviation of 0.5 per cent of on account of exceptional circumstances.

For 2017-18, the government aims to bring down the to 3.2 per cent of the Last fiscal, it had met the deficit target of 3.5 per cent of the

Two years ago, India was touted as a rare bright spot in a gloomy global economy, with growth outpacing a slowing

But since early 2016, 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 for the second straight quarter.

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.

First Published: Fri, September 22 2017. 18:46 IST