CII releases recommendations for stimulating economic growth

The Confederation of Indian Industry (CII) has released a set of recommendations to bring about a stimulus in the Indian Economy, according to a CNBC TV 18 report.

Shobana Kamineni, President of CII, stated that this is the right time for the government to inject the Indian economy with the appropriate stimulus tools.

This includes a 100 basis points rate cut, the recapitalisation of banks and support for the Micro, Small and Medium Enterprises (MSMEs) by providing cheaper credit.

The CII president also said that these measures would be necessary to bring out “the animal spirits of the Indian economy”.

She added that the government ought to start spending in rural areas, kickstart the 1 lakh crore projects in the pipeline, and work on large infrastructure projects to bring about job growth and fuel enterprise.

Also, in order to do so, there may be a need to relax fiscal deficit targets so as to bring about activity in the job-creating sectors.

The CII also recommended that the government take advantage of the leeway provided by the Fiscal Responsibility and Budget Management (FRBM) Act.

The 2003 FRBM Act permits for a 0.5 percent deviation in deficit target from the Gross Domestic Product (GDP).  The CII called for a relaxation of deficit targets to stimulate the economy.