New CII president pegs India's GDP growth rate for 2021-22 at 9.5%

19 Jun '21

2 min read

Mr T V Narendran. Pic: Tata Steel

TV Narendran, the new president of the Confederation of Indian Industry (CII), recently pegged India’s gross domestic product (GDP) growth rate for fiscal 2021-22 at 9.5 per cent. “Ultra-high frequency indicators strongly presage growth recovery following the second wave of the pandemic. With recent uptick in mobility indicators, traffic congestion index and daily railway passenger movement, we believe that 9.5 per cent growth rate can be achieved this year,” he noted.

Narendran is the chief executive officer and managing director of Tata Steel Limited.

“The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time. As the economy reopens post the second wave, a dual-pronged Government strategy is required to boost consumption and support industry till demand is well-entrenched,” he was quoted as saying during his first press interaction after taking over on May 31.

Referring to a CII survey that showed the impact of the pandemic on businesses, Narendran said a strong fiscal stimulus and government expenditure programme; expanding the Reserve Bank of India (RBI) balance sheet to meet the demand exigencies of the pandemic; and support to the industry through increase in Emergency Credit Line Guarantee Scheme (ECLGS) to ₹5 lakh crore along with extension of the scheme to March 31, 2022, and inclusion of more distressed sectors like retail are the key points to reenergise the economy.

“CII estimates that there is fiscal headroom of up to ₹3 lakh crore and this amount can be channelised towards direct cash transfers to the vulnerable people, higher allocation for MNREGA, short-term GST rate cuts and lower excise duty on fuel,” he was quoted as saying by a CII press release.

He suggested long-pending structural tax reforms to be considered. “As businesses reopen, their credit needs must be met and the financial sector should be able to absorb pandemic-induced non-performing assets,” he said. A corpus may be set up as a pandemic pool to cover the risk of losses from future pandemics.

CII has drafted a Code for Industry Staff Welfare to provide relief to families of employees who succumbed to Covid-19. The code suggests support by companies on five key areas—welfare support, income support, higher education support, term insurance support and support to contractual staff.

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