FICCI suggests steps to revive Indian economy hit by global slowdown

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New Delhi, Nov 20 (UNI) Expressing concern over the economic slowdown during interaction with BJP Prime Ministerial candidate L K Advani here today, Federation of Indian Chamber of Commerce and Industry (FICCI) suggested a slew of monetary and financial and fiscal measures for boosting growth momentum and bringing back investor confidence in the country's economy.

In a note given to the Opposition Leader, FICCI president Rajeev Chandrasekhar wanted reduction in cash reserve ratio by one percentage point to 4.5, the level seen in 2004 and in Reserve Bank's lending rate by 50 basis points to 7 per cent immediately and 5 per cent in the near term.

He also sought reduction by 200 basis points in the rate at which banks park their excess liquidity with the RBI, cut in bank rate by 100 basis points, and bringing down statutory liquidity ratio (SLR) from 24 to 22 per cent.

In the financial sector, the industry chamber wanted stabalisation funds for sectors where risk aversion has suddenly shot up and liquidity is not forthcoming. Banks must completely deliver on all sanctioned loan limits to corporates, it said.

Mr Chandrasekhar said private sector should not be crowded out from credit markets with liquidity being used for fertiliser and petroleum subsidies and sought increase in long term liquidity to corporates.

FICCI wanted focus on foreign direct investment which another industry chamber feared could decline by 20 per cent in the 200 billion dollars targeted this year. It also wanted government to attract sovereign funds (SWFs).

The apex chamber urged government to announce tax incentives for investment, enhance depreciation levels and introduce investment allowance.

It wanted hike in custom duties to protect domestic industry which, it said, is faced with a serious threat of dumping of goods in the Indian market by the Chinese manufacturers.

FICCI said large infrastructure projects could help in reviving economic activities and growth, suggesting the government to invest an additional Rs 100,000 crore per year on it.

It wanted reforms in agriculture to check inflationary pressures on economy and push for alternative sources of energy.

The chamber wanted the country to stop export of raw materials, saying these resources should be used for undertaking value addition within the country.


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