New CII chief Godrej pitches for reforms, more rate cuts by Dec

?Given the current status of the economy, we have ahead of us the herculean task of reviving economic growth to the pre-crisis level of over 9%. This needs structural reforms both at the central as well as the state level,? he said.

Godrej said the government’s decision to slap retrospective tax on various deals has ?created strong negative sentiments? among global investors. ?Those kind of policies along with the General Anti-Avoidance Rules (GAAR) should be amended,? Godrej said in his first press conference after assuming office as the head the country’s largest industry body.

He said CII will engage not only with the central government but also with state governments and political parties to ?sensitise? them about the benefits of the foreign direct investment (FDI) and to build a consensus on various reforms, including the implementation of the general sales tax, opening of multi-brand retail to foreign supermarket chains, and reforms in insurance and aviation among others.

He welcomed the Reserve Bank of India?s recent move to cut the key interest rate by 50 basis points, but said the repo rate needs to be slashed by another 100 basis point by December to fuel growth.

He said the the central bank?s recent announcement has ?revived corporate sentiments as well as consumers sentiments?. ?The RBI needs to support further low interest rates,? he added.

Hoping the interest rates to fall further, Godrej said some economic recovery is expected in the next fiscal and pegged the gross domestic product growth between 7.4% to 7.8% in 2012-13.

?Even if this strengthens to 8% to 8.5% in the following year, it would still be difficult to achieve an average rate of 9% in the 12th plan period of 2012-13 to 2016-17,? Godrej said. He lamented the stalled disinvestment process of

the state-owned enterprises and made a pitch for sell-offs of companies with about a quarter of the equity offered to the public.