CII moots 10-point agenda for reviving Indian economy
Hyderabad: Industry lobby, the Confederation of Indian Industry (CII) Tuesday mooted a 10-point agenda to revive India's economic growth through reforms and governance.
The CII national council, which met here, asked the government to act fast to avoid conditions getting worse and change the perception of the economy, which it said is one of the contributors to the depreciation of the rupee.
It called for early introduction of Goods and Services Tax (GST), saying this would be the biggest fiscal stimulus which can improve GDP growth by one and half percentage points.
The CII revival package proposes, among other things, a cut in the repo rate by 100 basis points, cut in cash reserve ratio (CRR) by 1000 bps, increasing foreign direct investment (FDI) limits in civil aviation and defence, allowing FDI in multi-brand retail and allowing accelerated depreciation for investments in plant and machinery at 25 percent.
Addressing a news conference after the council meeting, CII President Adi B. Godrej called for a monetary stimulus by the Reserve Bank of India (RBI) over the next six to nine months to help revive growth.
"Fortunately, inflationary expectations are coming down. Global commodity prices particularly of crude oil have started falling. This is the right time to create the monetary stimulus that can help revive the economy," he said.
Godrej said the objective should be to achieve 7.5 percent GDP growth rate during the current financial year. "It is difficult to predict but if GST legislation is passed early, it would accelerate."
"We should concentrate on what can be done in 2013-14. 2012-13 has already started. I think it is quite possible to get to 9 percent in 2013-14. CII will work assiduously at that possibility," Godrej added.
The GDP growth moderated to 6.5 percent in the last financial year. In the last quarter (Jan-March), the GDP growth was only 5.3 percent - the lowest in nine years.
Godrej, however, did not agree that the situation was comparable to 1991. He pointed out that the country was almost bankrupt in 1991 and the reform process had helped.
He compared the present situation with 2008 when there was global financial crisis. "We had fiscal stimulus, we had monetary stimulus. The government managed it very well. We are one of the economies that recovered faster. We again need to pull together to create a similar situation."