Better demand conditions – Banerjee
The Confederation of Indian Industry sees 2019 economic growth at 7.5%, citing better demand conditions, growing investments in infrastructure and critical spending on General Elections which must be held by coming May.
“Better demand conditions, settled GST implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24% will sustain the robust GDP growth in the range of 7.5% in 2019,” CII Director General Chandrajit Banerjee said on 30 Dec 2018.
India, which has emerged as the world’s fastest growing economy despite headwinds hitting global trade including China-US trade war, is strongly backed by the domestic consumer spending, infrastructure spending and the traditional high-spending by political parties in an Election General which will be seen in the first half 2019.
CII has identified seven key drivers for growth that need to be fostered and suggested policy actions for robust GDP growth to continue in 2019.
Among key growth drivers, CII hopes the GST Council will consider extending the tax to currently exempted sectors such as fuel, real estate, electricity and alcohol.
The chamber outlined that credit availability has been a challenge, particularly for the micro, small and medium enterprises, as credit flow to industry grew by a mere 2.3% in first half of the current financial year.
“CII submits that the RBI should introduce measures such as revisiting lending restrictions of PCA (Prompt Corrective Action) banks, opening of a limited special liquidity window to meet emergencies of financial institutions, including Mutual Funds besides others to improve liquidity in the system,” CII said.
The chamber believes the government will continue to place high priority on simplifying business procedures in 2019, especially in terms of working with states for grassroots improvements.
“We look forward to digitisation of land records, online single window systems in states, and enforcing contracts for even more improvements in ease of doing business,” the Press Trust of India quoted Banerjee as saying.
Going ahead, it opined that India also needs to increase domestic production of oil, providing a special window for oil marketing companies to procure fuel and stepping up diplomacy with the US to continue to secure crude oil purchase from Iran, one of the main source of cheaper fuel. fiinews