CII estimates India’s GDP growth to be in the band of 7.4% - 8.2%: Sanjiv Bajaj
- May 17, 2022, 10.45 AM
- DealMoney News Service
Sharing the likely growth scenarios for the Indian economy for this year, Sanjiv Bajaj, President Confederation of Indian Industry (CII) said that “CII expects the GDP growth in a range of 7.4-8.2% in 2022-23, with the outlook critically hinging on the trajectory of global crude oil prices”.
He further explained, “global headwinds and inflation will have to be countered with robust policy reforms, both domestic and external sector reforms, to unlock the growth potential of the economy. Tailwinds that are supportive of growth in the short-term include government capex, private sector investment which is showing an uptick aided by strong demand in some sectors and the PLI push in the others, good agriculture season on the back of the expectations of a good monsoon and positive export momentum”.
An immediate measure to moderate inflation could be to moderate taxes on fuel products, which constitute a large share of the retail pump prices of petrol and diesel. “CII would encourage Centre and State governments to collaborate in reducing these duties,” he added.
Bajaj said that India has the potential to become a US$ 40 trillion economy by the time it turns 100, in 2047, with milestones at US$5 trillion by 2026-27 and US$9 trillion by 2030-31.
Highlighting the sectoral drivers of growth, Bajaj elaborated that manufacturing and services will be the twin engines of growth. The enabling policies of the government particularly the PLI scheme, are expected to push manufacturing sector’s contribution in GVA to 27% by FY48. Similarly, Services, too, will witness its share rising from 53% to 55% in the terminal year. The contribution of exports to GDP must rise while the investment rate must be stepped up. Both government and industry must be equal partners in achieving this.
Elaborating on the important policy agenda for this decade, to set the growth momentum firmly in place, Bajaj outlined a agenda for the government.
One, both central and state governments must increase their expenditure on public health & education to make these services accessible to all. This will drive inclusive and equitable growth, improve workforce productivity, and make the economy more resilient. This will also drive consumption demand the biggest engine of the economy, by reducing out of pocket expenses on these two essentials leaving people with more to spend. Further, the process of providing universal coverage in health and education will create good quality jobs at scale.
Two, India should focus on scale and technology to power Atmanirbhar Bharat. More sectors should be brought under PLIs, especially those which are labour intensive such as leather, footwear, toys etc, and sectors where our imports are high, but there is a possibility of building a competitive domestic industry for example capital goods. Rural Manufacturing should be encouraged to take manufacturing to where the labour is. Government should also support smart manufacturing, the future of manufacturing, basis what other countries are offering in support to their industry.
Three, Employment Linked Incentive Schemes should be launched for select services sectors which have high growth potential, can generate jobs and can earn foreign exchange. To start with ELIs could cover Tourism, Logistics, Retail and Film, Animation & Gaming.
Four, reducing cost of doing business (CoDB), further improving ease of doing business (EoDB), decriminalising the business facings laws and de-clogging the judicial system, are necessary to further strengthen the business & investment climate in India.
