The Reserve Bank of India (RBI) must continue with a pause in the key repo rate and also change its stance to “neutral”, the new CII President R Dinesh said on Thursday. 

This is warranted given the fast moderation in inflation, Dinesh said here in his first press conference after assuming charge at the helm of this apex industry body. 

“We are not recommending any immediate cut in repo rate. The prudent approach (for the central bank) would be to wait and watch and RBI Governor Shaktikanta Das has recently made it clear that RBI would go by ground level situation and data before taking a call“, Dinesh said when asked if he would prefer a cut in repo rate by the central bank. 

These recommendations of CII comes a week before the next Monetary Policy Committee review meeting slated for June 6-8. 

BULLISH ON GDP GROWTH

Meanwhile, Dinesh said that CII expects GDP growth to be 6.5-6.7 per cent range in 2023-24. At a business-as-usual scenario and oil at $85/barrel, the GDP growth is estimated at 6.5 per cent for the current fiscal. The upside to this forecast is 6.7 per cent if oil is at $ 70 per barrel. Dinesh said that the assumptions for the upside scenario is that the Russia-Ukraine crisis does not flare up further and major global regions do not see any significant tensions; the US Fed pauses in its rate hike cycle with terminal rate seen at 5-5.25 per cent; assumption of a near normal monsoon; El Niño having limited impact and government spending on infra to continue as per plan. 

“There are both headwinds and tailwinds to growth. But we believe the tailwinds to growth outweighs the headwinds to growth this fiscal”, Dinesh said. He also saw fresh sighings in private investments in the economy, highlighting that commitments has zoomed to ₹29.7 lakh crore in 2022-23 from ₹14.9 lakh crore in the previous fiscal. F

He said that CII expects India’s GDP growth to leapfrog to 7.8 per cent in the next decade from 6.8 per cent in the previous one (ex-pandemic).

The theme of this year’s presidency under Dinesh is “Towards a Competitive and Sustainable India @100: Growth, livelihood, globalisation, Building Trust”.

8-POINTS REFORMS AGENDA

To boost India’s growth potential, CII has come out with ten points reform agenda, of which eight should be immediate focus areas, Dinesh said. 

The eight focus areas should be:

(I) Consensus Building on Reform Imperatives: Build consensus on land, labour, power and agriculture reforms 

(2) Financing growth: Tap long-term funds available with pension and insurance funds; innovative avenues for growth capital from banks.

(3) India on the Global Map: Set up National Trade and Promotion Agency; Fast track FTAs with UK, EU, Israel, GCC, EFTA; set up FTA facilitation centres; undertake policies for services export promotion

(4)Agriculture: Reforms to focus on productivity improvements 

(5) Energy Transition: Manage energy transition with right funding and sustain growth

(6) Land: Evolve India Industrial Land Bank as the national level land bank. 

(7) Decriminslisation of Economic and Business facing laws : Create legal and procedural safeguards relating to personal liability of directors and introduce a system of plea bargaining. 

(8) Ease of Doing Business: All approvals to be mandatorily provided through National Single Window System; Develop a cabinet secretary monitored centralised online grievance redressal mechanism for all EoDB issues and set up GST Appellate Tribunals and National Appellate Authority for Advance Ruling.

TASK FORCES

CII has decided to set up several task forces, including one on ‘Building Trust’ to be headed by former CII President Uday Kotak. It will also this year set up Quality Mission 2.0 to be headed by CII President Designate Sanjiv Puri. CII also plans to launch a national mission on advance manufacturing to be headed by former CII President T V Narendran, who is Managing Director of Tata Steel.