Chambers Worried Over Rising Budget Deficit

New Delhi, February 27: | Updated: Feb 28 2003, 05:30am hrs
Welcoming the positive industry outlook in the Economic Survey, apex industry bodies Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci) expressed concerns over the rising Budget deficit.

Ficci said the Survey has laid out a clear roadmap for achieving a growth target of 8 per cent for the 10th Plan period. It has rightly identified technology, competition and bechmarking to be the best international practices as the three drivers for rapid growth, said Ficci president AC Muthiah, adding that, this had lifted Indias consumer goods, automobiles and telecom sectors to higher growth trajectory with better quality to customers, and the same now needs to be extended to agriculture.

CII president Ashok Soota said the Survey had highlighted a positive outlook for the industry, but that the burgeoning Centre-state deficit was a key area of concern.

Mr Soota highlighted other areas of concern such as public finance and the govts management of the food economy. However, CII has declared that the industry is in agreement with Surveys assessments.

Ficci too, has expressed grave concern over the fact that the decline in the sanctions and disbursements by financial institutions are an indication that with the spread of universal banking, the importance of project lending is losing focus. The chamber also expressed concern over the increasing fiscal deficit, stating that it is absolutely essential to check the revenue deficit to ensure that government money flows for productive use, which will facilitate infrastructure growth.

Associated Chambers of Commerce and Industry (Assocham) president RK Somany said the time had come to walk the talk as any slippage in tackling the deteriorating fiscal situation, labour reforms, divestment, overhaul of the regulatory regime and removal of infrastructural bottlenecks would cost the country dear.

He emphasised the need to push the process of fiscal consolidation, increase the revenue kitty through user charges, phase out tax exemptions and plug evasions. He also said that there was a need for a strong surge in export-led growth in labour intensive manufacturing. The PHD Chamber of Commerce and Industry, on the other hand, expressed concern over the growth prospects of the economy Its president PK Jain said that the Economic Survey did not reflect a particularly rosy picture, expressing concern over subdued agriculture performance, but stated that in the light of the encouraging signs of recovery in the industrial and services sector it could be assumed that the economy could stage a rebound in a conducive setting.