Amid calls for stimulus to create jobs and boost economic growth, industry body CII on Friday sought an interest rate cut of 100 basis points and interventions for depreciation of the rupee rate that would increase exports.
Amid calls for stimulus to create jobs and boost economic growth, industry body CII on Friday sought an interest rate cut of 100 basis points and interventions for depreciation of the rupee rate that would increase exports. Earlier this week, finance minister Arun Jaitley held brainstorming sessions with Cabinet colleagues and government officials to devise a plan to lift economic growth, which slipped to a three-year low of 5.7% in the April-June quarter of 2017-18. “CII looks forward to quick growth in the GDP which we expect by year-end as industry gets over the teething issues related to GST,” CII quoted its president Shobana Kamineni saying. “It is encouraging to note that certain factors are positive such as automotive sector and personal loans,” she said.
A cut in interest rates would encourage domestic demand in sectors such as affordable housing, consumer durables and construction. Also, interest rate subvention in certain sectors such as exports, housing and small enterprises would also help economic growth, the CII said. There may be a need to relax the fiscal deficit targets to accommodate stimulus measures, particularly for job-creating sectors, it added. On the GST front, the industry body recommended procedural changes to ease initial administrative processes. Also, input tax credit refunds for exporters need to be passed on, CII said. Highlighting the need for bank recapitalisation for enabling credit growth to revive the economy, it said that the government may consider lowering its stakes in public sector banks for this purpose.