Industry chambers have asked the Government to revive manufacturing, cut policy rates and implement the second phase of Government spending.
Reacting to the economic growth numbers released on Friday, R.V. Kanoria, President, FICCI, said “The need of the hour is to push economic decision-making to improve sentiment. I would like to emphasise that many important economic decisions can be taken on administrative basis without new legislation.”
GDP growth slowed from eight per cent last year to just 5.5 per cent in the first quarter of this year. Manufacturing was stagnant at 0.2 per cent in first quarter of 2012-13 against 7.3 per cent in corresponding period last year.
“The contagion of slowdown is slowly spreading from manufacturing to other growth areas such as the services sector. Trade, hotels, transport and communication sectors have slowed to four per cent in the first quarter of this year, against 13.8 per cent growth last year same period,” said The Associated Chambers of Commerce and Industry of India (Assocham).
Rajkumar Dhoot, President, Assocham, said that the figures call for reviving the manufacturing sector. “This is also the time when the Reserve Bank of India should consider resetting its credit policy,” he said.
Chandrajit Banerjee, Director-General, CII, stressed on the need for Government spending and cutting repo rates to spur economy.
“This is the time to think about implementing the second phase of Jawaharlal Nehru National Urban Renewal Mission, which would provide an impetus to investment and consumption demand. For a pick-up in rural demand, the Government could consider implementing the ambitious Bharat Nirman programme,” he said.