New Delhi, June 1 (ANI): The Confederation of Indian Industry (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, said Adi Godrej, President, CII, while interacting with media here today.
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 wakeup 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 bps to correct the hardening of interest rates and this should be combined with a reduction of 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% accelerated depreciation for investments in plant and machinery. While we make efforts to revive investments, green efforts by the industry also needs to be encouraged by extending 25 percent weighted tax deduction on expenditure incurred by companied on green initiatives, he added.
Godrej, suggesting measures for reviving investment rate, 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.
A clear plan with numbers - plans for additional revenue and rationalised expenditure- for containing fiscal deficit could be released by the Government as such an announcement would go a long way in boosting investor sentiments and also arrest the crowding out of private investment due to high levels of market borrowings raised by the Government, said Godrej.
Opening up of foreign direct investment in critical sectors such as single brand retail, civil aviation and defence and allowing FDI in multi-brand retail will go a long way in improving the current negative sentiments on policy inaction and also help increase the capital flows which is essential to arrest the current account deficit and sliding Rupee, said Godrej.
Suggesting measures to arrest the current account deficit, Mr Godrej said that there is an urgent need to incentivise exports through interest rate subvention by two percent, extending focus market scheme to untapped area and providing marketing support to SME exporters should be accorded top priority.
To ease the pressure on the rupee, Godrej opined that RBI could open a temporary special window for importers of certain items, which have an inelastic demand such as Crude Oil and other POL products, to meet their foreign exchange requirements. This may reduce the demand pressure on Foreign currency and thus the pressure on the Rupee, he added. (ANI)
|
|
Comments:
