NEW DELHI: A settled goods and services tax (GST), improving credit availability and capacity expansion from increasing investment in infrastructureNSE 0.92 % are among seven key drivers that will help Indian economy grow 7.5% next year, said the Confederation of Indian Industry (CII).
In its ‘Growth Outlook for 2019’, CII said that amid growing global vulnerabilities of trade wars and US monetary tightening, India shines as the fastest growing major economy with robust gross domestic product (GDP) in 2018 that is expected to continue to expand in 2019.
“Better demand conditions, settled GST implementation, capacity expansion resulting from growing investments in infrastructure and continuing positive effects of the reform policies undertaken and improved credit offtake especially in services sector at 24% will sustain the robust GDP growth in the range of 7.5% in 2019,” CII said in a statement.
The positive outlook is supported by improved demand conditions arising from election spending, stronger services and infrastructure sector, it said.
The Reserve Bank of India (RBI) expects India’s economy to grow 7.4% in 2018-19.
CII had suggested only three slabs for GST – a standard rate, a higher rate for demerit goods and a lower rate for some mass consumption items – and inclusion of fuels, real estate, electricity and alcohol in the ambit of the levy.
The industry lobby has recommended that the RBI revisit lending restrictions on banks under the PCA (prompt and corrective action) and open a limited special liquidity window to meet emergencies of financial institutions including mutual funds to improve liquidity in the system.
It has also suggested digitisation of land records, online single window systems in states and enforcing contracts among measures to enhance ease of doing business
India aims to feature among the top 50 countries in the World Bank’s ease of doing business index, on which it is currently ranked 77.
In its ‘Growth Outlook for 2019’, CII said that a “strong programme of infrastructure development” will provide growth impetus for downstream industry sectors and generate employment opportunities.
To strengthen agriculture produce marketing, it has suggested that all states implement the Agriculture Produce and Livestock Marketing Model Act. Besides, implementing e-NAM mandis will help promote inter-state trade, it said.
CII also said that additional benches of the National Company Law Tribunal will address the issue of non-performing assets.
It said that increasing domestic oil production, special window for oil marketing companies to procure oil and stepping up diplomacy with the US to continue oil purchases from Iran will help India guard against the risk of higher oil prices.
