With an aim to bringing the economy back to a sustained high growth path, industry chamber FICCI on Thursday unveiled its Economic Agenda for long term growth. It underlined the need to strengthen key enablers for growth of enterprises and job creation.
“We wish to see India get back to a high growth track. Adding 10-12 million jobs annually requires a growth of 8-9% over a long period,” FICCI President Sidharth Birla said.
The three key tangible macroeconomic indicators having a bearing on investor perception are fiscal deficit, current account deficit and inflation, he said. To keep fiscal deficit in check, planned capital expenditure should not be compromised for revenue spending. Social spending is a short term measure for job creation, or inclusive but consumption based prosperity. Birla added that a permanent solution lies in linking social spending to asset creation and skill building.
Current account deficit must be brought down, the FICCI President said, and policy interventions are needed to curb imports of natural resources which are available domestically. Comprehensive plans for manufacturing competitiveness are also required.
With dwindling FDI, the country’s dependence on FIIs is considerable. “Deepening of domestic capital markets is the only lasting solution to improve resilience too unforeseen events,” Birla said.
Also, agricultural production and productivity must be raised to tackle food inflation.
Clarity in policy formulation, greater certainty in legislative interpretation besides time-bound, transparent implementation of policies with minimal discretion is what business seeks.
According to World Bank’s latest report on Doing Business, India has been ranked 134th out of 189 countries in terms of ease of doing business.
The FICCI chief said, “Enabling predictable policy outcomes, tax equity, and a situation where decision making – both in businesses and Government – is not compromised by a propensity to cast aspersions in hindsight, must be on top of Government’s agenda.”