Reacting to the fourth quarter GDP data released today, the CII Director-General, Mr Chandrajit Banerjee, said it confirmed the chamber’s own estimates of economy being on the throes of a serious slowdown.

At 6.5 per cent growth, the GDP in 2011-12 has grown at lower than the crisis period growth of 6.7 per cent, the Confederation of Indian Industry (CII) has said.

With a huge fiscal deficit and a widening current account deficit, this calls for immediate and bold actions from the Government and the RBI in a coordinated manner, Mr Banerjee said.

Investment cycle

Repo rate and CRR cuts are called for as also measures from the Government to kick-start the investment cycle, since growth in capital formation has been negative for the last few months, he added.

The Government of India and state governments have to work in tandem to ensure that major projects that are held up are put under implementation mode within one month.

Accelerated depreciation has to be considered to ensure that companies are induced to invest.

In short a comprehensive “Economic Revival Package” has to be announced at the earliest, he said.

CII hopes that the political leadership in the country, across party lines would converge on this issue of national interest and actions would be swift and decisive.

Remedy for ailing economy

CII's action plan:

* A 100 bps reduction in interest rates by December to revive investment sentiment; 100 bps cut in CRR to ease liquidity pressure and support lending, and easing restrictions and investment limits on insurance and pension funds to encourage domestic fund flows into capital markets;

*The Government should draft a roadmap for listed PSEs to have 25 per cent equity offered to public, and correct retail oil prices to reduce losses of oil sector PSUs, to reduce subsidy for checking fiscal deficit;

*About 285 mega-projects, out of 500, are slowing down across sectors. Select 50 of these for fast-track clearance to spur growth;

*A quick identification of 4-5 large manufacturing zones;

*Resolution of issues that are a drag on core sectors, such as coal, power and oil and gas;

*Interventions in agricultural sector to ease supply side bottlenecks and effect land leasing reforms as in Punjab and Rajasthan. CII plans to work with state governments to position India as the “food factory of the world” and launch 30 agri-business hubs across the eastern Indian states;

*GST, DTC and FDI reforms need quick progress; GST implementation, expected from April 2013, alone can increase GDP growth by 1-1.5%;

*Push for FDI in critical sectors like multi-brand retail, aviation, insurance and defence;

>krsrivats@thehindu.co.in

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