FICCI welcomes economic policy statement made by Jaitley

The Federation of Indian Chamber of Commerce and Industry (FICCI) on Tuesday welcomed the economic policy statement made by Union Finance Minister Arun Jaitley.

Most of the decisions announced by the Finance Minister echo the views presented by the FICCI to the union ministries of Finance, Commerce and Industry over the past month.

The FICCI has hailed the emphasis placed by the Finance Minister on increasing public spending, though it "believes the government can afford to ease the fiscal deficit to GDP ratio from the stated 3.2 per cent to 3.5 per cent without any serious negative macro-economic consequences."

The FICCI also said it believes that a rate of inflation of around 4.0 per cent would facilitate the acceleration of growth with increased public spending. It has also strongly advocated public investment in roads, railways and low cost housing. Hence, it welcomes the 'BharatMala' project and the plan to boost public investment in affordable housing and railway modernisation.

The decision to invest in the PSU bank recapitalisation should result in increased lending, especially to the MSME sector.

The FICCI hopes that the Reserve Bank of India will also pro-actively seek to boost investment and consumer demand through an easing of the repo rate.

"Bank recapitalisation should also encourage banks to pass on the benefits of a lower rate of interest to investors and consumers", said Mr Pankaj R Patel, President, FICCI.