CII welcomes the recovery in economic growth projected by the Economic Survey. GDP growth is projected to accelerate to 7.6% in 2012-13 and further to 8.6% in the following year. However, “a stronger recovery in growth is possible if supply-side bottlenecks are eased and economic reforms are taken forward”, said Mr. Muthuraman, President, CII. CII pointed out that the first set of reforms needed to address the slowdown in growth are related to fiscal consolidation. CII has suggested a host of measures in its Pre-Budget Memorandum on revenue augmentation and expenditure rationalisation including subsidies. On revenue augmentation CII has recommended timely implementation of tax reforms such as moving to negative list of services to expand the service tax base, targeting higher level of disinvestment and unlocking the value of fixed assets of sick PSUs.
The next set of reforms relate to debottlenecking the supply side constraints that has added to inflationary pressure in certain essential commodities. In addition to removing the perishables from APMC list, CII has also suggested incentives for State Governments to implement the model APMC Act. Productivity in agriculture also needs immediate attention by implementation of a national mission on farm mechanisation on PPP mode.
The Economic Survey has also echoed CII views that further opening up of FDI in several areas would not only help raise capital for growth but also bring in the linkages needed for inclusive growth. For instance, as point out by the Economic Survey, FDI in multibrand retail could lead to investments in agri-infrastructure facilities, especially on post-harvest infrastructure.
While the Economic Survey states remarkable achievements in a few infrastructure areas, CII feels that growth of Infrastructure is a critical area of concern. In addition to addressing the land acquisition issues in infrastructure sector the Government needs to focus on uninterrupted supply of coal to augment capacities in the power sector.
“We hope that the Union Budget 2012-13 would provide the direction for implementation of the critical reforms outlined in the Economic Survey 2011-12”, said Mr B Muthuraman.
15th March 2012