New Delhi, Nov 28 (UNI) CII commended the GDP growth figure of 7.6 per cent, saying that it was manifestation of the resilience of the Indian economy in the face of the global turmoil.
The growth momentum so far remain intact. In fact, the services sector which accounts for a bulk of the economy continued to grow at a strong pace of 9.6 per cent, the chamber said in a statement.
Estimated GDP growth in the first half of 2008-09 now stands at 7.8 per cent.
There is little doubt that growth is likely to slow down further in the second half when the full impact of the global economic crisis will be felt, it added.
However, if the government and the RBI continue to take steps to boost economic growth it seems likely that full year growth will not fall below the seven per cent mark.
For addressing the decline in growth and to bridge the gap between growth of first half and second half of 2008-09, the focus should be on growth.
Besides monetary policy actions such as a further reduction in interest rates, CII recommends fiscal stimulus to the economy through demand generating measures.
''Fast-tracking of key projects would create demand are imperative for sustaining growth at 7.4-7.8 per cent,'' CII Director General Chandrajit Banerjee said.
CII has also mentioned that a large number of sectors such as steel, cement, automobiles, auto-components, chemicals, textiles are witnessing contraction of top line and pressure on bottomlines.
Fast tracking of infrastructure investments would provide the growth impetus for sectors such as steel and cement.
Further, cutting interest rates and enhancing liquidity would particularly enhance the demand for automobiles and auto-components and the specific sectors such as textiles and chemicals which are under pressure and may need additional protection from dumping.
In addition, the flow of credit to SMEs needs to be ensured, as they are likely to be disproportionately affected by the credit squeeze.
''Policy measures are needed to ensure that negative sentiment is reversed sooner rather than later,'' said Mr Banerjee.
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