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CII estimates India's GDP growth to be in 7.4-8.2% band

17 May '22
3 min read
Pic: Shutterstock
Pic: Shutterstock

The Confederation of Indian Industry (CII) expects the country’s gross domestic product (GDP) growth in fiscal 2022-23 in the 7.4-8.2 per cent range, with the outlook critically hinging on the trajectory of global crude oil prices, according to its president Sanjiv Bajaj. He was addressing the media for the first time after taking over as president.  

“Global headwinds and inflation will have to be countered with robust policy reforms, both domestic and external sector reforms, to unlock the growth potential of the economy. Tailwinds that are supportive of growth in the short-term include government capex, private sector investment which is showing an uptick aided by strong demand in some sectors, and the PLI [performance-linked incentive] push in the others, good agriculture season on the back of the expectations of a good monsoon and positive export momentum,” he was quoted as saying in a CII press release.  

An immediate measure to moderate inflation could be to moderate taxes on fuel products, which constitute a large share of the retail pump prices of petrol and diesel. CII would encourage the central and state governments to collaborate in reducing these duties, he said.  

Bajaj said India has the potential to become a $40 trillion economy by 2047, with milestones at $5 trillion by 2026-27 and $9 trillion by 2030-31.

Manufacturing and services will be the twin engines of growth. The enabling policies of the government, particularly the PLI scheme, are expected to push manufacturing sector’s contribution in the gross value added (GVA) to 27 per cent by fiscal 2047-48, he said.

Bajaj outlined a 10-point agenda for the government.

First, both central and state governments must increase their expenditure on public health and education to make these services accessible to all. This will drive inclusive and equitable growth, improve workforce productivity, and make the economy more resilient.

This will also drive consumption demand the biggest engine of the economy, by reducing out of pocket expenses on these two essentials leaving people with more to spend. Further, the process of providing universal coverage in health and education will create good quality jobs at scale.  

Second, India should focus on scale and technology to power Atmanirbhar Bharat. More sectors should be brought under the PLI scheme, especially those which are labour-intensive like leather, footwear, toys, etc, and sectors where India’s imports are high, but there is a possibility of building a competitive domestic industry.

Rural Manufacturing should be encouraged to take manufacturing to where the labour is. The government should also support smart manufacturing.  

Third, employment-linked incentive (ELI) schemes should be launched for select services sectors that have high growth potential, can generate jobs and can earn foreign exchange.

Fourth, the cost of doing business (CoDB) should be reduced and the judicial system should be de-clogged to help businesses facing court cases. These could be achieved by initiating power sector reforms, bringing fuels under the goods and services tax, expediting Gati Shakti and onboarding states, and speeding up resolution of commercial disputes.

Bajaj announced that CII will build a CoDB index for comparing CoDB across Indian states. High logistics costs being one of the key drivers of higher costs of manufacturing in India, CII will develop a Logistics Policy for five states and also conduct a study to assess the level of logistics outsourcing aimed at reducing costs.  

Other points included financial sector reforms, a synchronised approach towards technology, stepping up engagement with the rest of the world, preparing sectoral road maps for net zero transition and forming councils for consensus building on reforms related to land, labour, power and agriculture.  

Fibre2Fashion News Desk (DS)

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