New Delhi: Confederation of Indian Industry (CII) president TV Narendran has pegged India’s GDP growth rate for 2021-22 at 9.5 per cent, “Ultra-high frequency indicators strongly presage growth recovery following the second wave of the pandemic. With recent uptick in mobility indicators, traffic congestion index and daily railway passenger movement, we believe that 9.5 per cent growth rate can be achieved this year,” noted Narendran, also CEO and Managing Director, Tata Steel Limited.
Narendran, who took charge as the president, CII on May 31, stated that growth needs to pick up to 9 per cent by 2024-25 with public expenditure, reforms and vaccination as key levers. “The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time. As the economy reopens post the second wave, a dual-pronged Government strategy is required to boost consumption and support industry till demand is well-entrenched,” he said.
Referring to a CII survey that showed the impact of infections on businesses, Narendran, while addressing his first press conference on June 17, outlined key points to reenergize the economy. He batted for a strong fiscal stimulus and Government expenditure program. “CII estimates that there is fiscal headroom of up to Rs 3 lakh crore and this amount can be channelized towards direct cash transfers to the vulnerable people, higher allocation for MNREGA, short-term GST rate cuts and lower excise duty on fuel.”
Demand can also be revitalized through a time bound tax concession of interest rate subvention for home buyers, a LTC cash voucher scheme as done last year and extending the Atmanirbhar Bharat Rozgar Yojana till 31 March 2022, he added. He further urged for expansion in the Reserve Bank of India (RBI) balance sheet to meet the demand exigencies of the pandemic.
Narendran also called for support to industry through an increase in Emergency Credit Line Guarantee Scheme (ECLGS) to Rs 5 lakh crore along with extension of the scheme to 31 March 2022 and inclusion of more distressed sectors such as retail. He further suggested long pending structural tax reforms such as inclusion of ATF and other fuel products under GST to be considered.
He emphasized: “As businesses reopen, their credit needs must be met and the financial sector should be able to absorb pandemic-induced non-performing assets.” A corpus may be set up as a pandemic pool to cover the risk of losses from future pandemics. He suggested a range of measures for accelerating vaccination. As per CII estimates, an average of about 71 lakh daily vaccinations are required over June to December 2021 to administer at least a single dose to all adults. For this, the vaccine availability must increase by 2 times.
He stated that the government should fast track all necessary licensing requirements and pay in advance for purchases, besides providing capital subsidies to incentivize production. It should urge the IP owners of vaccines to issue licenses for mass manufacturing with transfer of technology. Narendran advocated for the appointment of an empowered Minister of Vaccination to accelerate the vaccination program including in rural areas, procurement and distribution of vaccines to states based on scientific criteria and monitoring progress through a daily dashboard.
Noting that a third wave is a possibility, CII president urged that district administrations and the private sector partner to set up Covid Care Centres in rural areas. Free land, deemed clearances and tax benefits could be extended for this. Government should also keep handy reserves of essential drugs, vaccines and oxygen to meet infection spikes. He also suggested a multi-pronged National Oxygen Development Plan to create a robust oxygen ecosystem.
“With majority of the population vaccinated by the end of this year, implementation of big-ticket reforms in factor markets and the financial sector, and a large fiscal stimulus, we will be able to reach the critical $5 trillion mark by 2025-26. This is the best-case scenario that CII has estimated,” stated Narendran.
Outlining the CII agenda for the year under the theme of ‘Building India for a New World: Competitiveness, Growth, Sustainability, Technology,’ Narendran said that CII has set up several task forces to go into the issues of third wave of pandemic preparation, risk surveillance and early warning systems, and strengthening scientific data. He informed that CII aims to set up E-ICUs in rural areas across 12 States, for which pilot projects in Maharashtra and Haryana have been successful.
The CII has drafted a Code for Industry Staff Welfare to provide relief to families of employees who succumbed to Covid-19. The code suggests support by companies in five key areas including welfare support, income support, higher education support, term insurance support and support to contractual staff. /BI/
