The government should consider a reduction in the rates of personal income tax to revive the demand cycle and support economic recovery, said Sanjiv Bajaj, president, the Confederation of Indian Industry(CII).

Reduction in taxes is a way to put money into the pockets of the middle class, which would eventually stimulate demand and get the wheels of growth rolling. “There is a large consumer base that needs to be spotted and, unfortunately, we haven’t seen the great growth levels that we want to see,” said Bajaj.

India’s gross domestic product (GDP) is expected to grow in the range of 7.4 per cent-8.2 per cent in the FY23, according to CII.

‘Increase forex reserves’

Since the capital outflows by foreign institutional investors are being driven by an unsteady global economic climate, India too needs to increase its foreign exchange reserves to stimulate the economy. “For this, the government should work towards the inclusion of the large market cap companies into the global equity indices like MSCI and FTSE indices to expedite India’s entry into JP Morgan’s Global Emerging-Market Bond Index and Barclays Global Bond Index,” he added.

In addition to the recommendations, CCI stated that it will continue to scale up its engagement in skilling and plans to skill one-and-a-half lakh youth. It will also work to improve manufacturing competitiveness by proposing to reduce cost of doing business index (CoDB), and work with the States to strengthen the national single window system.