Reacting to the Economic Survey 2013-14 presented in the Parliament today, Ajay Shriram, President, CII, said it portrays a realistic picture of the economy with GDP growth estimated in the range of 5.4 to 5.9 per cent during the current fiscal.
"The growth outlook, as projected by the Economic Survey, is realistic and in consonance with CII's prognosis which predicts that the pro-reform approach of the new government would work to revive the India growth story' said Shriram.
"However, the bold reform measures outlined in the Economic Survey need to be implemented on the ground to re-energize investment and revive demand in the economy. In fact, the various measures that find mention in the Survey raises expectations that the Budget would be a most progressive one," he added.
As delineated in the Economic Survey, it is eminently feasible to revive investment and script a turnaround in growth provided the government adopts a three pronged approach of creating a framework for sustained low and stable inflation, setting public finances on a sustainable path by tax and administrative reforms and creating a legal framework for a well-functioning market economy, the CII release said.
CII wholeheartedly supports the need for a fiscal consolidation roadmap backed by an FRBM Act with teeth, ensuring greater transparency and improved budget management to step up the quality of fiscal deficit by boosting capital expenditure to re-energise investments and contain inflation. CII agrees that apart from fiscal consolidation, creating a competitive market for food would address the long festering problem of inflation. Revamping social sector schemes such a MNREGA, SSA would also help also in removing inefficiency in the system
The Survey correctly points towards the need for rationalizing non-productive input subsidies, correcting distortions in factor markets and facilitating investment in infrastructure. CII agrees on the need for a stable and predictable tax regime, fewer exemptions in direct taxes and a transformation of tax administration for improving the investment climate and moving towards the next level of growth. "CII strongly advocates early implementation of GST which would increase growth of GDP by about 1.5% and hopes that the suggestion in the Survey on single rate GST would be fast tracked", said Shriram.
The Economic Survey rightly calls for faster regulatory clearances and putting in place the legal foundations for a well-functioning market economy for India. Revamping of laws and regulations governing business is urgently needed. Similarly, initiating financial sector reforms to address the problem of deteriorating asset quality deserve priority consideration according to CII.
"CII hopes that the Budget would implement some of the bold reform measures indicated in the Survey. The Budget should come out with innovative measures to revive the economy and provide an impetus to investment and growth which would create job opportunities for the large number of unemployed youth entering the job market," added Shriram.
