The Hindu Business Line : Focus needs to be more on growth than inflation: CII

Chennai, Sept 4 The focus needs to be on growth rather than inflation, according to the Director General of Confederation of Indian Industry, Mr Chandrajit Banerjee.

Speaking to Business Line, he said a sectoral break-up shows mixed signals within the economy with some revival in consumer goods despite rising interest rates, while basic and capital goods are slowing down.

Besides, electricity generation has decelerated significantly indicating supply constraints. Cost of finance, slower export demand, erosion of competitiveness, increasing cost of inputs and investments, including lack of infrastructure have impacted industrial growth, he said.

In this scenario, the country should focus more on growth, which would help improve the economy. “There are several economies in the world that have grown despite higher inflation,” he said.

However, some issues need to be addressed in order to propel the growth further.

Important issues

Prime amongst the issues are infrastructure constraints and procedural barriers, he said. Though there is growth in infrastructure development, it is not happening at the pace it ought to be. In order to spur the activity, it is necessary to encourage more private public partnership in infrastructure projects as it could enable the country to catch with the rest of the world.

In about 15 years, India should aspire to have 10 per cent of world trade, which is currently in fractions. This could happen only if all the energies are driven towards industrial growth, he said.

Push to investments

Giving a push to higher investments, removing infrastructure constraints, liquefying public assets and controlling the rising fiscal deficit would help accelerate economic growth. Besides, it is necessary to improve on export competitiveness, enhance availability of rural credit and remove policy-driven supply constrains especially in power and mining, Mr Banerjee said.

Education, skills

There is a significant gap in education and skills sets, which could become a major impediment soon.

Moreover, there is no focus on certain skills such as gardening, empowered security, electricians and plumbing , which are vital for the development of equitable growth, propagated by the CII, he said.

CII intiatives

To address this issue, the CII has taken up the initiative with about 25 projects at the district level with several organisations.

Besides it has adopted 147 industrial training institutes (ITI) to upgrade both soft and trade-related skills. This year, it would adopt 100 more ITIs for similar projects, he said.

IGNOU training

Recently the CII has signed an MoU with the Indira Gandhi National Open University to impart training to people in rural areas in communication and a host of engineering skills including electrical and textiles.

In 2009, this initiative will make more than a lakh of people employable, he said.

On inflation he said, “it is possible to control inflation if we can respond to oil crisis by conserving energy and have effective mechanism for pricing and food distribution.

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