New Delhi: With India's economic growth rate slowing down to a nine-year low of 6.5 cent in 2011-12, industry body CII on Friday said its high time that the government take measures to boost growth and demanded a stimulus package for spurring investments.
"The economic indicators show that now the situation is even worse than during the advent of the global financial crisis in 2008. The government should react now," CII President Adi Godrej told reporters here.
Terming the slowdown in economic growth rate as a "wakeup call" for the government to step up measures to put the economy back on the growth trajectory, he said, the country is in need of an "economic revival package".
The chamber sought an immediate cut in repo rate and cash reserve ratio (CRR) by at least 100 basis points from RBI.
This, it said, would not only make borrowings cheaper but also improve sentiments.
CII also suggested that the government should provide 25 percent accelerated depreciation for investments in plant and machinery.
Stating that the industry was not "happy with the pace of reform," Godrej said reforms like foreign direct investment in critical sectors such as multi-brand retail and civil aviation would go a long way in improving the negative sentiments on policy inaction and increasing the capital flows.
CII is of the view that Goods and Services Tax (GST) regime should be brought in immediately.
"It (GST) is the only thing that will be a game changer for the industry," the CII President said.
"Reforms should be implemented fast. We should also reduce the subsidy burden," Godrej said, adding that there was a need to incentivise exports through interest rate subvention of two percent.
Throwing clear signs of slowdown continuing this fiscal, the growth rate of eight core infrastructure sectors like coal, cement, electricity, oil, and steel, halved to 2.2 percent in April against 4.2 percent a year ago.
The chamber demanded that green efforts by the industry need to be encouraged by extending 25 percent weighted tax deduction on expenditure incurred on such initiatives.
To ease the pressure on the rupee, the CII President said that RBI could open a temporary special window for importers of certain items, which have an inelastic demand such as crude oil, to meet their foreign exchange requirements.
"This may reduce the demand pressure on foreign currency and thus the pressure on the rupee," he said.
Meanwhile, moving up for the second straight day, the rupee today gained a whopping 54 paise to end at 55.54 against the dollar on persistent dollar-selling by exporters amid RBI hinting at opening a separate dollar window for oil firms.