India Inc, caught between an uncertain domestic market and sticky interest rates, has asked the government to come with a series of immediate fiscal and monetary measures for an early turnaround.
Apex industry chambers Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci) on Friday unveiled separate 100-day action plans for the government, packed with recommendations to spur growth.
“Clearly, the government needs to take definite action on six major fronts, namely, embark on an investment-led growth strategy through higher public and private sector investments; stimulate demand through fiscal measures to bring consumers back into the market; launch a second green revolution; announce major initiatives on skill development and human resource enrichment; significantly enhance national security and drastically improve governance,” Harsh Pati Singhania, President, FICCI said.
CII President Venu Srinivasan said interest rates in India were high compared to many other economies. Key policy rates should be cut by at least 0.5 percentage points, he said. CII’s key recommendations include monetisation of fiscal deficit and reducing interest rates to counter large government borrowings which are negating efforts of RBI.
CII also called for increase government spend on infrastructure and ensure implementation. “Infrastructure investemtns are not only urgently needed in the immediate term for growth impetus as more than 200 industry sectors get benefited for demand creation, but it is also essential for improving competitiveness of Indian manufacturing,” Srinivasan said.
The industry chamber also called for hastening of reforms in the banking and insurance sector. “Move to allow 26 per cent foreign investment in pension and fund management companies awaits the approval of Parliament. The Bill is pending in Parliament since 2005,” CII said.
Industry has also called for early implementation of goods and services tax (GST) for both unification of markets and for higher tax revenue collection.