The Confederation of Indian Industry cited lack of domestic demand and subdued global economic conditions as two key problems plaguing the industry though, it said, the government wouldn’t be able to do much about either of these.
Nevertheless, fast-tracking delayed projects could boost demand, Chandrajit Banerjee, director general, CII, told HT.
“RBI action on further lowering of interest rates can also be an immediate step.”
However, he said, it was not right to say investments are not increasing. “Data shows that Rs 10 lakh crore worth of new investments have been announced. This is twice as much as the average of the previous two years.”
He also pointed out that stalled projects had begun moving ahead due to the government’s efforts to coordinate administrative processes.
While Banerjee said the government had laid strong foundations for stable economic growth and social security, he listed out capital adequacy ratio, banks’ bad loans, infrastructure processes such as public private partnership models, long-term financing and efficient administrative procedures as areas requiring focus.
He also highlighted the need to increase infrastructure spending in rural areas, which in turn would help generate more jobs.
On the issue of rising oil prices, he said, “As long as the per barrel cost of crude remains below $75, it shouldn’t impact GDP growth rate unduly.”