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Industry body CII has submitted a 10-point agenda to revive the country's economic growth, which includes measures like containing the current account deficit (CAD), trimming the fiscal deficit, and introducing the much-awaited Goods and Services Tax.
"While the Government has outlined targets for CAD and fiscal deficit, specific steps are urgently required to stimulate growth and to improve investor sentiments," CII President Kris Gopalakrishnan said.
CII had presented 'An Agenda for Economic Revival' to the Government in July.
Emphasising on the need to restore the country's export competitiveness globally, CII said the government must immediately slash the transaction costs.
Government must announce sovereign bond issue to finance the CAD and to attract capital whereas to achieve much-needed fiscal consolidation, it must urgently cut subsidy expenditure on fertilisers and oil products, CII said.
Government must also offload share in public sector enterprises and banks to raise funds to the tune of Rs 50,000 crore, utilising these for capital spending in infrastructure, it added.
Expressing concerns about the growth of gross fixed capital formation, or investment, coming down to just 1.7 per cent in 2012-13 from 4.4 per cent in 2011-12, the industry body demanded reduction in interest rates by 100 basis points during the current fiscal.
In its 10-point agenda, CII further pointed out that the uncertain regulatory and policy environment had led to a drop of 80 per cent in new project announcements and the value of stalled projects going up by two-thirds in the last five years.
"Power, infrastructure and manufacturing projects are shelved due to inadequate linkages, retrospective policy implementation, and high interest rates," it said.
Highlighting the crucial role that Goods and Services Tax (GST) can play in reviving growth, CII said: "GST has many benefits for manufacturing, services and exports and could add 1.5 per cent to GDP growth rate. This is the best stimulus that the economy can have".
Government should allocate coal blocks in a transparent manner and resolve hurdles to mining to revive the power sector. Regulatory autonomy to state electricity boards and effective unbundling of generation, transmission and distribution is essential, it said.
Moreover, the 10-point agenda also includes mobilising household savings, incentivising Micro, Small and Medium Enterprises (MSMEs) coupled with a consistent, transparent and stable tax policy regime to fast-track implementation of crucial infrastructure and manufacturing projects.
