With Finance Minister Nirmala Sitharaman having announced measures to boost demand and improve liquidity, the Confederation of Indian Industry (CII) said on Sunday that economic growth would climb in the coming months.
In a statement, the industry body said that the steps would provide stability and a fresh boost to the country's economy.
"India's GVA (Gross Valued Added) growth stood at 5.8 per cent in the fourth quarter of 2018-19 and advance indicators reveal that it might remain range-bound in Q1 FY2019-20. The Finance Minister's policy package covers financial sector, taxation, MSME, and automotive sector, which were being advocated by CII," it said.
"CII expects that the economy will climb up in coming months."
It also said that removal of the surcharge on foreign portfolio investments (FPI) by the Finance Ministry and amendments to the FPI regulations by the Securities and Exchange Board of India (Sebi) is expected to boost investor sentiments.
Commenting on the measures announced on Friday, CII president Vikram Kirloskar said: "The macro impact of the economic package announced can be expected to be significant. It is indeed commendable that all these multi-sectoral steps were carried out without pressure on the fiscal deficit. With her six-dimensional announcement, FM has indeed hit a sixer out of the ground."
According to CII president designate Uday Kotak, the measures to remove enhanced surcharge on FPIs, securing transmission of lower repo rates, addressing delayed payments and ensuring that bank officials are confident about lending, are strategically targeted towards raising investments.
"Creation of a shelf of infrastructure projects and announcement of a long-term financial institution have wide positive ramifications for the economy," Mr Kotak said.
According to the industry body, the tax measures such as exempting start-up and investors from 'angel tax' and announcing easier long-term and short-term capital gains tax would re-energise investments. The clogged pipeline of loans has been also unblocked with various steps for banks, non-banking financial companies (NBFCs) and housing finance companies (HFCs) to infuse liquidity and address procedural issues, it added.
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