New Delhi: Leaders of Indian industry in their meeting with PMEAC Chairman C Rangarajan on Monday pressed for an economic revival package, expeditious reforms and cut in interest rates to arrest slowdown.
Representatives of the three apex chambers CII, Assocham and PHDCCI also raised the issues of high interest rates, liberalisation of FDI regime and implementation of the Goods and Service Tax (GST) regime.
“…there is an urgent need to create conditions for revival of private investment by…further reduction in repo (short-term lending) rate by 100 basis points, and reduction
of Cash Reserve Ratio (CRR) by 100 basis points”, CII President Adi Godrej told reporters after the meeting .
The Reserve Bank, which opted for status quo in its last policy last month, is scheduled to review the monetary policy on July 31.
Rangarajan, himself a former RBI governor, and key aide of Prime Minister Manmohan Singh met the industry chambers to help the Government firm up steps to boost growth.
As the Prime Minister himself had assumed the charge of Finance Ministry following exit of Pranab Mukherjee, the onus of taking initiatives to arrest falling growth will be on the
Godrej demanded that government should work out an economic revival package in consultation with the RBI to arrest falling GDP growth which slipped to nine-year low of
6.5 per cent in 2011-12.
According to Assocham President Rajkumar Dhoot, “The process reforms are significant…to address the current challenges faced by the Indian economy and must be fast-tracked.”
These, he added, were also necessary to boost growth of manufacturing sector which dwindled to a low of 5.3 percent in the last quarter of the previous fiscal.
“Fall in the GDP growth to 6.5 percent during 2011-12 from 8.4 percent in the previous year is one concern, but an acute fall in quarterly growth rates to a level of 5.3 percent which is the lowest quarterly growth rate in past seven years, reflects the actual magnitude of this issue,” said Dhoot, who is also a Member of Parliament.
All the aspects of a policy processes, he added, must be dealt through a single window and administrative processes involved in the implementation of government policies should
be simplified with a view to reducing compliance burden.
Management of the domestic economy, according to Dhoot, “is a bigger cause of concern at the moment as an uncertain global situation together with rising risk aversion and
slowing capital inflows are posing grave challenges to India’s growth and balance of payments outlook.”
The domestic business entities, he added, seems to be in a fix with regards to both continuation and further expansion of their activities.