Govt should focus on infra, agri: CII

MUMBAI: The government needs to focus on infrastructure and agriculture to achieve a GDP growth of 8-10% in 2009-10, said Venu Srinivasan, the newly-appointed president of Confederation of Indian Industry (CII) at a media briefing in Mumbai. Both the sectors, according to him, are grossly under-invested compared to China.

���Infrastructure is way behind what it needs to be. As a result India Inc���s transaction costs on logistics and power transmission are much higher compared to other countries,��� said Mr Srinivasan as he underlined CII���s priorities for the Indian economy in 2009-10. He maintained that the burgeoning fiscal deficit could detract the government from its objective of inclusive growth.

The issue of the rising fiscal deficit came up for discussion. At about 11% of GDP, the fiscal deficit in 2008-09 that includes state deficits, has been an area of concern. ���Huge government borrowing in the current fiscal will not leave enough liquidity for India Inc to fuel its growth. The government must bring down its subsidy bill and a lot of it is misdirected,��� added Mr Srinivasan.

Another issue was that of the indirect tax structure that has affected Corporate India. One example is octroi duty. ���Octroi duty was introduced by the French 200 years ago though the Maharashtra government is still continuing with it,��� said Naushad Forbes, chairman, CII (Western Region). ���The government should allow free movement of goods within the country,��� said Mr Srinivasan.

CII is in favour of a further cut in repo and reverse repo rates ��� by 50 basis points ��� as credit is still expensive for India Inc. It has also asked for certain reforms in the monetary policy too apart from allowing the trading of corporate debt in the secondary market where mutual funds and retail investors could invest.

According to Mr Srinivasan, the current economic situation is better than what it was in October-December 2008 where the availability of liquidity was a concern. ���We believe that the economic crisis will end by mid-2010,��� he said.