MUMBAI, June 2: The Confederation of Indian Industries (CII) president Adi Godrej today expressed concern over the decelerating
performance of the Indian economy during the current fiscal and sought an economic revival package to bring the economy on the of recovery.
‘The CII is deeply concerned over the decelerating performance of the Indian economy during the current fiscal with GDP numbers plunging to 6.5 per cent in 2011-12, which is even below the 6.7 per cent level achieved during the global financial crisis of 2008-09,’ Mr Godrej said while interacting with media here.
Similarly, industrial output has grown at a meager 2.8 per cent
during 2011-12 which is much below 4.4 per cent achieved during 2008-09.
‘A close reading of figures show that our economic indicators, in some respects, are even worse than during the advent of the global financial crisis during 2008, hence this is a wake up call for the government to step up measures to put the economy back on the growth trajectory,’ Mr Godrej said.
The CII president, therefore, opined that India was in need of an ‘Economic Revival Package’.
Unveiling the CII suggestions for economic revival, the CII president said that it was critical that monetary easing is done to kick start the investment cycle.
Mr Godrej suggested further reduction in repo rate by 100 basis
points to correct the hardening of interest rates and this should be combined with a reduction of the Cash Reserve Ratio (CRR) by 100 bps, he added.
In addition to the monetary easing, the CII president also suggested that to encourage investments by the private sector and to revive the investment sentiment, government could announce 25 per cent accelerated depreciation for investments in plant and machinery.
He also suggested measures for reviving investment rate and said that the government could extend all approvals and clearances for 50 large projects on priority basis in the next 30 days in consultation with state governments and relevant ministries.
This will quickly put projects on implementation mode which in turn would create demand for more than 100 industrial sectors, he pointed.
The CII president called for the opening up of foreign direct investments in critical sectors such as single brand retail, civil
aviation and defence and allowing FDI in multi-brand retail.
Mr Godrej opined that there is an urgent need to incentivise exports to arrest the current account deficit.
The CII strongly recommends fast tracking the implementation of
National Manufacturing Policy by expediting movement on the pending economic reforms on land, labour, procedures, financial sector and taxation including accelerated depreciation to boost investments in manufacturing.
It is also imperative that reforms to deepen the financial markets are initiated by encouraging corporate debt market development. This would help make available credit at affordable cost to the micro, small and medium enterprises (MSME) sector, he added.
(UNI)
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