Sanjiv Puri, Chairman and Managing Director, ITC Ltd, and President of CII, addresses a press conference, in New Delhi on June 13, 2024.
| Photo Credit: ANI
Industry body CII on Thursday made a case for pushing reforms in sectors like land, labour, and agriculture by the Modi 3.0 government to accelerate economic growth estimated to be around 8% in FY25.
CII President Sanjiv Puri said several policy interventions in the past put the economy on “a much stronger wicket”.
“The growth rate is poised to touch 8% during the current year, marking the fourth consecutive year of above 7% growth.
“The growth estimate hinges critically on addressing unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well and expectations of a normal monsoon among other factors,” Mr. Puri added.
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Expressing optimism regarding the economy’s performance, he said, “Very clearly, we are expecting all three sectors of the economy – agriculture, services and industry – to fire and do well next year.” Mr. Puri added that CII expects inflation to be between 4-4.5% in FY25.
Addressing his first press conference after becoming CII President, Mr. Puri, Chairman & MD, ITC Ltd, said private sector investment, which has been an area of concern, was robust and broad-based across sectors.
“Private sector investment has been an area of concern sometime back, but the good news today is that it is in the right trajectory… it is robust. It had dropped to 20.7% of GDP and it is now at 23.8%, which is more than the pre-Covid levels,” Mr. Puri said.
About the outlook for rural consumption, Puri said, “We certainly see green shoots of pick up in rural (demand)… the expectation for a good monsoon and better crop yields leading to improved realisations that augurs well for the rural economy.”
The industry body has also suggested rationalisation of rates with three slabs and inclusion of sectors like petroleum and real estate that are presently out of its ambit, besides infrastructure status for the hospitality sector.
“As far as GST is concerned, what we are saying there can be three slabs and there are areas like petroleum real estate that are outside the ambit… be included in the GST,” Mr. Puri said.
On reforms related to land, he said CII suggests a moderation in stamp duty to lower the cost of acquisition for economic activity and improvement in efficiency with measures like setting up of a state-level land authority and digitisation of the procedures.
Mr. Puri outlined a 14-point agenda for the new government for driving the next phase of economic transformation.
Many of the next generation reforms lie in the state and concurrent domains and require tough consensus building to take them forward, he said, adding that the inter-state institutional platforms on the lines of GST councils can be created.
Employment-linked incentive (ELI) schemes with appropriate outcome indicators can be launched for labour-intensive sectors with high growth potential such as toys, textiles and apparels, woods-based industries, tourism, logistics, among others.
The ELI scheme can also address the low female participation rate by giving a higher incentive for hiring of female labour.
Besides, an international mobility authority should be set up to track employment opportunities in other countries and facilitate Indian youth to benefit from these opportunities, Mr. Puri said.
“Priority should be given to further easing the regulatory and compliance burden through simplification, rationalisation and decriminalisation of regulatory approvals and compliances, time-bound clearances using the National Single Window System, strengthening alternate dispute redressal system and adoption self-declaration/third party certification and deemed approvals, wherever feasible,” it stated.
It also recommended interventions in the areas of land, power and logistics to reduce the cost of doing business.
CII also pitched for tax reforms to continue to help boost the investment climate. On direct taxes, the government may consider laying down a roadmap for rationalising and simplifying the capital gains tax and the TDS provisions, the CII chairman added.
