The Confederation of Indian Industry (CII) on Sunday unveiled a blueprint to accelerate India’s economic growthgrowth through a raft of reforms, including in factors of production, a simplified single GST structure, rationalised tariffs and implementation of labour codes.
Key policy and factor market reforms
The industry body, in its report “Policies for a Competitive India”, laid out more than 250 actionable recommendations across 14 critical reform areas aligned with the government’s Viksit Bharat vision.CII said achieving the goal of Viksit Bharat — a $351-trillion economy by 2047 — would require a real CAGR of 7.3%.“While Indiaʼs performance in global indices, such as ease of doing business, innovation, logistics performance and competitiveness, has improved, the country still underperforms relative to its size and capabilities,” it said.
Among its suggestions, CII emphasised fiscal prudence, inflation management and modernised statistical systems. To make the public sector more efficient, it recommended privatisation of non-strategic PSEs, creation of a sovereign wealth fund and stronger governance.For factor market reforms, it pushed for digitised land titling, streamlined labour codes, a national minimum wage framework, and fast-track dispute resolution.
On energy security, CII recommended competitive tariffs, elimination of cross-subsidisation, stronger transmission networks, private participation in nuclear energy and a green hydrogen roadmap.To strengthen manufacturing, it proposed addressing the ‘missing middle’ through capital support, industrial corridors and enhanced freight connectivity.
On the trade front, the CII suggested building a roadmap for joining mega regional trade agreements such as CPTPP by utilizing experience from the India-UK FTA and undertaking domestic reforms. It also sought a ‘Committee / Taskforce on Tradeʼ to identify capability gaps between domestic and global advancements and suggest regulatory/institutional reforms. It also suggested improving utilization of existing Free Trade Agreements with ASEAN, Japan and Korea to make them more balanced, fair and reciprocal.Fiscal recommendations included creation of a two-tier Fiscal Council at the Centre and states, gradual consolidation of revenue deficit to zero and an institutionalised credit rating system for state borrowings to link borrowing costs to fiscal performance.
GST and trade
To reduce subsidies, the industry lobby also suggested that the government reclassify the criteria for food subsidy, and provide direct income support to the newly identified beneficiaries through direct benefit transfer (DBT) instead of in-kind transfer for food. This will also allow diversification of consumption in food, as PDS caters to only rice and wheat. Another large component of subsidies, fertiliser subsidy, should also be moved to the DBT mode in which the monetary support is directly provided to the farmers.
It asked expedition of the implementation of the four labour codes.On the direct tax front, it suggested linking of exemption and standard deduction to inflation in personal income tax and undertaking measures to widen the tax base to improve tax revenues.On GST, it said lay down a roadmap to move towards a single rate structure of 10% by 2030 as recommended by the Vijay Kelkar Committee. Another ask was to subsume petroleum, electricity, real estate and potable alcohol under GST.