)
With the rupee continuing its dismal run by slumping to new lows on a daily basis, the Confederation of Indian (CII) batted for floating of long-term sovereign bonds, along with a slew of other suggestions.
The apex industry body in its report “Agenda for economic revival” has urged the government to go for sovereign bonds in order to manage the currency volatility. This comes close to the heels of Finance Minister P Chidambaram’s statement that the government has not ruled out issuing of sovereign bonds or debt aimed at Indians living overseas. On Thursday, the Indian currency had fallen to a record low versus dollar crossing the 65 mark.
The report sought transparent and predictable policy environment to encourage foreign direct investment to tide over the crisis. On the other hand, it opined that RBI should open a dollar window for oil companies to sell rupees and buy dollars from the central bank. While CII highlighted the need to curb discretionary non-trade payments overseas, it demanded more incentives to exporters to bring back forex earnings more readily into the country.
On the backdrop of GDP growth decelerating to a decadal low of 5% in 2012-13 and industrial production continuing to display signs of weakness and inflationary pressure on a high, the apex chamber has lined up a 10-point agenda before the government.
It asked for measures like further reducing the repo rate by 75 basis points and CRR by 100 bps in the current financial year to ensure adequate liquidity, implementation of GST, fast tracking of public sector disinvestment and cutting of fertilizer subsidies.
In order to manage the current account deficit, the association wants the country to take measures to boost exports, while discouraging non-essential imports like those of gold. Other major suggestions included steps to strengthen power sector and need for incentivizing micro, small and medium entrepreneurs. The report asks to expedite competitive bidding of captive coal blocks through process similar to NELP.
