NEW DELHI: The Confederation of Indian Industry (CII) has called for an interest rate cut of 100 basis points for boosting the economic growth rate. It has also suggested interventions for depreciation of the exchange rate that would increase export-related industry.
“CII is of the firm belief that the current blip in growth rates is temporary and we are confident of a strong recovery by fiscal year end as industry gets over the teething problems of GST and other positive measures take effect.
New investments will also start early next year as capacities fill up." said CII President Shobana Kamineni.
A cut in interest rates would encourage domestic demand in sectors such as affordable housing, consumer durables and construction. Interest Rate Subvention in certain sectors such as exports, housing and MSME would also help raise growth, noted the CII statement.
On the GST front, CII recommends procedural changes to ease initial administrative processes. These include allowing C form set-off, addressing reverse charges, redressing mismatches of higher rates on inputs and lower rates on final goods, and grandfathering of existing regional incentives among others. Also, input tax credit refunds for exporters need to be passed on, said CII.