In a media interaction, CII President, TV Narendran said, “CII estimates that there is fiscal headroom of up to Rs 3 lakh crore and this amount can be channelized towards direct cash transfers to the vulnerable people, the higher allocation for MNREGA, short-term GST rate cuts and lower excise duty on fuel.”
“Ultra-high frequency indicators strongly presage growth recovery following the second wave of the pandemic. With the recent uptick in mobility indicators, traffic congestion index, and daily railway passenger movement, we believe that a 9.5% growth rate can be achieved this year,” he said.
This growth will be driven by the robust external demand and large-scale vaccination which will allow the economy to revive itself.
One of the important measures suggested by the CII to enhance demand is to facilitate cash transfers to households through the Jan Dhan accounts.
Another measure to boost the demand in the economy can be through ‘time-bound tax concession of interest rate subvention for home buyers’.
Pressing on no hikes in the rates for the time being, the CII President commented on the Reserve Bank of India’s unchanged key rates saying that the chamber was not in favor of a rate cut.
Further answering the question on the private sector investment on capacity expansions, he said, “as more and more sectors come back and are able to capitalize on demand growth and margin expansion, you will see private sector investment coming back. Also, the government’s move on PLI has been good.
A lot of investments are coming in. FDI coming into the country is $82-83 billion, and 50% of it is in electronics, computer, hardware-related, which is also good. Also, Budget announcements on infrastructure spending will drive positive sentiment,” he said.
Reiterating RBI’s focus on vaccination to recover the economy, Narendran suggested speeding up the vaccination at an average of around 71 lakh per day to immunize the adult population by December 2021.
In addition to immunization, the CII also suggested a National Oxygen Development Plan create a robust oxygen ecosystem. To oversee these measures, he even recommended the appointment of a separate ‘Vaccine Minister’ to boost the government’s pandemic response program which includes vaccination in the rural areas.
CII also added another suggestion to the process that a ‘National Pandemic Pool’ should be in place by the Government in order to settle insurance claims rising due to the second wave of COVID-19.