India Inc. bullish about higher economic growth

Wednesday, 07 July 2004, 19:30 IST
Printer Print Email Email
NEW DELHI: Indian industry Wednesday said the country was poised to achieve higher economic growth on a sustainable basis provided the government introduced measures to boost farm and industrial growth. Welcoming the findings of the government's economic survey presented to parliament Wednesday, industry lobby groups said fiscal consolidation and improvement in infrastructure would also help achieve higher economic growth. The economic survey highlighted the need for fiscal consolidation, boosting farm growth, expanding industry by 10 percent, keeping inflation under five percent and sustaining the growth momentum between seven and eight percent. The economic survey came a day before the presentation of the federal budget for 2004-05 by Finance Minister P. Chidambaram. "The survey has rightly placed high priority to overhauling the tax regime and addressing the roadblocks in the way of Indian industry," said Yogendra Modi, president of the Federation of Indian Chambers of Commerce and Industry (FICCI). "The survey has mentioned distortions in the indirect tax structure, restrictions in closure of firms and rigidities in labour laws among the constraints for faster industrial growth," he added. On the caution sounded by the survey on the possibility of a hike in the interest rates, FICCI said a sudden spurt in interest rates could act as a check on the growth process. The Associated Chambers of Commerce and Industry of India (Assocham) said the target of achieving 10 percent industrial and eight percent economic growth were feasible provided adequate infrastructure facilities are available to industry. Assocham president Mahendra Sanghi said industry would have to grow at the projected rate to ensure that economic growth of between seven and eight percent was achieved on a sustainable basis. "This is essential since the agriculture sector is unlikely to register an increase of about three percent growth in the current year over its growth rate of the last fiscal," he said. "The sound performance of the Indian economy in 2004-05 will also depend on the volatility of the global crude oil prices which will impact the global recovery." Confederation of Indian Industry (CII) president Sunil Munjal said the decline in public investment in agriculture was a serious concern and that the private sector should now be encouraged to participate in the rural economy. He noted that despite significant improvements in the competitiveness of Indian industry over the last decade, industrial growth had not exceeded 6.4 to 6.5 percent in the last two years. "The share of manufacturing in gross domestic product, which is currently as low as 17 percent, needs to be increased urgently," Munjal asserted. "For this, investment in manufacturing must be stepped up by giving the right signals to the investing community," he maintained.
Source: IANS