Industry chambers on Monday sought easing of the monetary policy and a revival package to bring the economy back on a high-growth path. It also said concerns of the industry, as well as investors, needed to be addressed.
Terming the economic situation in the country as “grave”, the Federation of Indian Chambers of Commerce and Industry (Ficci) called for easing of monetary policy to “put our house in order and not blame external factors.” In a press conference on Monday, senior Ficci officials laid out a 12-point programme to address the crisis.
The Confederation of Indian Industry (CII) regretted the economy’s dismal state, especially since the GDP (gross domestic product) growth numbers last week confirmed India Inc’s fears of a slowdown. CII President Adi Godrej sought an economic revival package for the country.
The Indian economy grew 5.3 per cent in the last quarter of 2011-12, pulling the annual growth down to 6.5 per cent.
Meanwhile, the Associated Chambers of Commerce and Industry of India (Assocham) “strongly condemned” the negative sentiment prevailing in the industry. “Assocham strongly condemns a sense of negativity that has been doing the rounds during the past few weeks. This has conveyed an impression that at the moment, nothing is going right for the Indian economy,” said an Assocham release.
Ficci President R V Kanoria said, “There has to be a clear recognition on the part of the ruling and Opposition parties that we are in a crisis. All parties need to stand united and strengthen the hands of policymakers to help them take bold decisions and act proactively and decisively," he said.
Other senior leaders of the chamber said external factors were not the only reasons behind the sorry state of economic affairs. Secretary-General Rajiv Kumar said, “The depth and seriousness of the crisis is not being brought forth by the government.”
Kanoria said factors like excessive monetary tightening, delays and uncertainty over key economic legislations and projects delays due to factors like stalled environmental clearances had led to the dismal economic growth. He sought a 200-basis point cut in key policy rates and a 100-basis point cut in the cash reserve ratio. He added dual pricing led to black marketing and, therefore, diesel prices should be decontrolled and a one-time tax should be imposed on diesel cars.
As a part of the 12-point programme, Ficci sought reforms like expediting the Goods and Services Tax and foreign direct investment in multi-brand retail and aviation. Kanoria added the issue of repatriation of black money needed to be addressed.