New Delhi: The Reserve Bank of India should cut key policy rates by at least one per cent, and the government needs to come out with stimulus package to revive the economy, Adi Godrej, president of Confederation of Indian Industry ( CII), said on Friday.
Godrej's comments came a day after the government data showed that India's economic growth slumped to a nine-year low of 5.3 per cent in the fourth quarter of fiscal 2011-12.
He said the economic situation in the country was worse than during the global financial crisis of 2008-09.
India's gross domestic product expanded by 6.5 per cent in 2011-12, which is even lower than the 6.7 per cent level achieved during the global financial crisis of 2008-09.
In a media interaction here, Godrej, who is also the chairman of Godrej Group, suggested that the central bank should cut key policy rates by at least 100 basis points, or one per cent.
In addition to monetary easing, Godrej also suggested that in order to encourage investments by the private sector and to revive investment sentiment, the government could announce 25 per cent accelerated depreciation for investments in plant and machinery.
"While we make efforts to revive investments, green efforts by the industry also need to be encouraged by extending 25 per cent weighted tax deduction on expenditure incurred by companies on green initiatives," he said.
Suggesting measures for reviving investment, Godrej said the government should 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 said.