The Confederation of Indian Industry (CII) on Tuesday said that it understood the reasons behind the Reserve Bank of India's (RBI's) decision to review of the monetary policy.
The CII said it has noted that the RBI has held its key rates owing to the volatility in the rupee.
"We understand the decision of the RBI on the rates. We draw heart from the statement of the RBI saying that had it not been for the volatility, the rates could have been reduced, since inflation has started to moderate. We see this as a softening of stance by the RBI" said Mr Kris Gopalakrishnan, President, CII.
However, the moderation of growth outlook by the RBI is a matter of great concern and this enforces our view that actions on multiple fronts are required to help the economy revive. Besides a large number of policies needing implementation, CII hopes that at the forthcoming session of the Parliament, some of the key legislations would get enacted, which would send out the correct messages to investors at home and abroad. These include the Bills on Insurance, Pensions, etc. the release said.
"We have shared with the Government our concerns about the high Current Account Deficit and this calls for financing measures, but more importantly, we need to ensure that we are able to establish a very competitive manufacturing sector. Our exports need to increase exponentially and with a strong manufacturing sector we should be able to obviate the need for many imports, which could be very well manufactured within the country," Gopalakrishan said.
The CII release said that in this context, there needs to be focussed attention on getting projects cleared in a mission mode. CII has suggested that the top 100 projects of the country needs a time bound clearance mechanism, which is transparent. In the current context, the proposed industrial corridors and the setting up of the National Investment and Manufacturing Zones assumes special importance. There should be pre clearances looked at at the time of formation of the NIMZs in line with what the DMIC is planning to do.
In order to deal with the problem of episodic inflationary bouts, it is imperative that supply side issues are dealt with adequately, including interventions in the agricultural side like abolishing perishables from APMC, etc. the CII release went on to say.
