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Govt needs to speed up reforms to push economic growth

Monday, June 06, 2016
By A Business Reporter

Government needs to speed up implementation of GST, address the issue of cheap imports and improve investment climate as majority of sectors are witnessing 'moderate' growth, says a CII survey. The survey, which tracks the growth of economic sectors on a quarterly basis, also stressed on the quick implementation of the announcements in the budget especially in the infrastructure space, boosting export competitiveness and addressing the issue of delayed payments.

Overall, the current trends reveal that majority of the sectors are continuing to witness 'moderate' growth trends with 'excellent' and 'high' growth limited to some sectors, it said. However, a decline in the share of sectors registering 'low' growth is clearly an indication towards the bottoming out of growth trends in the majority of sectors. "Going forward, on the back of the various measures and structural reforms taken by the government, it is expected that the current momentum would be supportive of the revival becoming broad based in the coming quarters," it said.

It said key economic reforms like GST, land acquisition, labour laws, public procurement policy will add to improving the business environment and also play a big role in investment decisions. To further support the Make in India initiative, there is a need to strengthen anti-dumping laws to protect local manufacturing and provide subsidies on production of major raw materials of key export products to make them cost competitive, it said. "Increasing tax credit and providing tax deduction for R&D would provide a competitive edge to several sectors involving R&D. Tax incentives would significantly help small companies, which face a difficult task of acquiring credit from banks," the CII-ASCON survey said.

To further push the pace of recovery in economic growth, the respondents to the survey have suggested several broad measures including "need to speed up reforms, focus on implementation and improving investment climate". The survey stated that while a majority of the sectors are still continuing to witness 'moderate’ growth rates of ( 0 to 10%), 'excellent' (less than 20%) and 'high' (10-20%) growth are limited only to few sectors.

Moreover, there has been a sharp decline in the share of sectors registering 'low' growth. Out of the 102 sectors surveyed including crude oil, cement and natural gas, the share of sectors registering 'excellent' growth has remained constant during the fourth quarter of 2015-16. However, the share of sectors witnessing 'high' growth has surged substantially to 20.6%.

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