Industry body CII also complimented the Bharatiya Janata Party on its strong performance in General Elections 2014. "The outcome of the General Elections reaffirms India?s vibrant and dynamic democracy and would greatly help to revive growth and investor sentiments," stated Ajay Shriram, President, CII, commenting on the results of the electoral process.
"The economic reforms agenda can be taken forward with a stable political dispensation and a multidimensional tool-box of policy instruments is required to kick-start growth," noted Mr Shriram. "With prudent macroeconomic management, CII expects that the economy could recover to 6.5% GDP growth rate in 2014-15 as against an estimated 4.9% in 2013-14. Continued reforms could take GDP growth rate to 8% level in three years."
According to CII, the top priorities ahead of the new Government would be to revive economic growth and create millions of new jobs. CII would engage with the new Government to offer constructive suggestions on major issues of inflation control, fiscal consolidation, revival of industrial growth, and introduction of Goods and Services Tax (GST), said the CII press release. "CII is ready with detailed recommendations for new ministers which it would present when the new Cabinet is constituted," added Mr Banerjee.
Reforms would require addressing investment revival and improving conditions for doing business across all sectors of agriculture, manufacturing and mining, services and infrastructure. At the same time, it would require strengthening education, skill development, institutional capacity and governance. A key issue to be addressed for job creation with social security is labour law architecture.
CII would partner with policy makers for action on top issues:
? Introduction of GST ? CII has suggested a comprehensive GST with a low rate and covering all goods and services that would boost industry.
? Fiscal consolidation and containment of subsidies ? Industry would expect the Government to adhere to fiscal deficit targets and bring out a roadmap for achieving them.
? Containing inflation by addressing supply-side bottlenecks ? CII has called for better laws governing marketing of perishables and other agricultural products and greater investment by the private sector in cold chain, storage and marketing infrastructure in PPP mode.
? Monetary easing ? CII strongly calls for reduction in the repo rate by 100 bps during the current year.
? Stable and competitive exchange rate ? India needs to guard against volatile short-term flows and protect its currency to promote exports.
? Mining ? CII expects a strong intervention and co-ordination to resolve multiple issues in the mining sector relating to allocation of natural resources, involvement of private sector and availability of fuel for power sector.
? PPP - An institutional mechanism to renegotiate the terms of concession in Public Private Partnership contracts in infrastructure could help resolve stuck funds.
? Governance and administrative reforms ? CII recommends expansion of e-governance to simplify administrative processes and clearances. These should help to improve and facilitate the environment for doing business, said CII.
? Promoting employment - Restructuring labour laws including introduction of Fixed Term Employment for industry to hire manpower on short term assignments would help to create new jobs on a large scale.
? Ease of Doing Business: CII is of the opinion that India needs to move up significantly on the ease of doing business index, on which India is ranked 134 out of 189 countries assessed by the World Bank. The time bound target should be to reach top 10.
? One of the biggest issues that industry has had to grapple with in the recent past has been retrospective taxation. CII would urge the new government to ensure that no retrospective changes are made to tax policies in the future.