The deteriorating macro-economic conditions and worsening growth outlook cause widespread concern. It is essential therefore that measures for economic revival, reforms and good governance are accorded the highest priority to get back to a high GDP growth trajectory, according to Mr. Adi Godrej, President, Confederation of Indian Industry (CII).
Addressing a press conference in Chennai, Mr. Godrej said that CII’s Theme for 2012-13 will be “Reviving Economic Growth with a strong focus on Reforms and Governance”. Structural reforms, both at the Central and State levels, need to be undertaken on a war footing. CII has been continuously engaging with the Government and political parties in its bid to promote reforms in critical areas such as banking, insurance, land acquisition, manufacturing, mining, etc. This has been stepped up in the current year as certain reforms have the potential to be game-changers for the economy. “Opening up of foreign direct investment in critical sectors such as single brand retail, civil aviation and defence and allowing FDI in multi-brand retail will also go a long way in improving the sentiments on economic growth and also help increase capital flows”.
Mr. Godrej further observed further that to stimulate investments, CII is advocating further reduction in interest rates by 100 bps by December 2012 and easing banks’ reserve ratio, accompanied by measures to unclog the supply side to control inflation.
The next generation of economic reforms is at the State level. Some of the key reforms that CII would advocate relate to agriculture, power, land acquisition and procedural & clearance issues faced in setting up new businesses. CII proposes to set up a Central task force to monitor State-level reforms.
On the energy front, while CII will continue to advocate coal and hydrocarbon reforms to alleviate fuel shortages which have proved a key bottleneck for the power sector, distribution reforms in this space are another critical area. There is also a need to explore implementation of renewable energy-based power projects to reduce power deficit in the country.
Manufacturing can and should become the engine of growth for the Indian economy. For this, CII is engaging with the Government to identify and promote four-five large manufacturing zones in resource-endowed States with a focus on green manufacturing.
In the agriculture sector, States must facilitate reforms such as strengthening legislation around contract farming; de-notification of vegetables and other perishables from the APMC list and long-term land leasing of agricultural land for cultivation with farmers still retaining their ownership rights.
According to Mr. Godrej, India’s infrastructure deficit is widely acknowledged as a critical impediment to achieving higher growth. Therefore, to step up the pace of infrastructure development, CII has launched a task force to monitor implementation of projects of national importance.