FICCI, Assocham differ on state of Indian economy

NEW DELHI: Two of India's premier business chambers have taken divergent views of the state of the economy, with Ficci terming it a 'grave' situation while Assocham saying that it is not yet 'off limits'.

India's economic growth dropped to a nine-year low of 6.5% in 2011-12 with the last quarter reporting just 5.2% growth, against the worst in nine years.

"India is in the midst of a grave economic crisis," Ficci President R V Kanoria told reporters in Delhi after releasing a 12-point agenda for the government, which included allowing foreign direct investment in multi-brand retail and bringing down fiscal deficit.

"The combination of low growth, high inflation, high fiscal deficit and the highest ever trade account deficit has raised a lot of concern," he said.

The other measures suggested include end to populist doles, rollout of goods and services tax, not to pass land acquisition bill in the current form, provide fiscal stimulus to spur investments, decontrol diesel prices and take steps to energise coal sector. The chamber also urged political parties to work together to steer the country out of a crisis.

"There has to be a clear recognition on the part of ruling and opposition parties that we are in crisis situation and all parties need to stand united and strengthen the hands of policy makers to take bold decisions and act pro-actively and decisively," Kanoria said.

Ficci blamed the current economic problems on domestic factors like "excessive monetary tightening, delays and uncertainty over key economic legislations, project delays on account of factors including stalled environmental clearances, problems in land acquisition, prolonged pause in reforms and an atmosphere of unwillingness in decision making in bureaucracy".