Concurring with a downward revision of the country's growth forecast to 5.3 per cent by the Prime Minister's Economic Advisory Council, India Inc has said policymakers must take steps to expedite project clearances, establish coal linkages and cut down on subsidies in order to kick-start investments and promote growth.
"The PMEAC has projected a realistic outlook on the economy with GDP growth slated to be lower at 5.3 per cent in 2013-14 from 6.4 per cent projected earlier. The PMEAC's projections are on expected lines and do not come as a surprise," said Confederation of Indian Industry (CII) director general Chandrajit Banerjee.
However, that is not to undermine the need for continued policy interventions to revive growth, Mr Banerjee said. There is need for ensuring fast implementation of cleared projects by removing procedural bottlenecks, he added.
Prime Minister's key economic advisor C Rangarajan on Friday lowered India's growth forecast for the current fiscal year to 5.3 per cent from 6.4 per cent projected earlier and listed out host of measures including further liberalisation of FDI norms to improve economic condition.
"The downward revision in growth projection for the year 2013-14 was anticipated. Given the present state of the economy, it is imperative that all steps are taken to bring growth back to the higher trajectory," said Ficci secretary general Didar Singh.
The PMEAC had in April projected 6.4 per cent growth for the economy for the current financial year. GDP growth was at 5 per cent in 2012-13.
"The PMEAC's projection is realistic and based on the current state of affairs. It takes into account the challenges before the economy by way of global factors such as withdrawal of US stimulus and pressure on rupee," said Rana Kapoor, president of the Associated Chambers of Commerce and Industry of India (Assocham).
"We believe that the current economic situation is expected to improve in the ensuing months at the back of moderating inflationary scenario and various reform measures undertaken by Government and RBI," said the PHD Chamber of Commerce and Industry.
In order to promote growth, Mr Rangarajan suggested that the government should liberalise FDI investment norms, resolve tax concerns of the industry, fast track public sector investment and initiate measures to contain fiscal deficit.
"Our efforts should be geared towards having a long term strategy to economise imports of oil, coal, capital goods, electronics and fertilisers. Further, we need to have greater clarity on our policy with regard to iron ore mining and exports", said Mr Singh of Ficci.
Mr Rangarajan expressed hope the current account deficit in 2013-14 will come down to $70 billion or 3.8 per cent of GDP, from $88.2 billion, or 4.8 per cent of GDP, a year ago.
However, much of the monetary easing would depend on developments in the forex market, he said, adding "Controlling current account deficit remains the main concern at present".
"We agree with the PMEAC that controlling current account deficit remains the main concern at present. Improving trade deficit in recent months is a healthy sign and we hope that with global growth picking up this situation will improve further," Mr Singh further said.