Industry bodies Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry have asked for cut in interest rates to spur the sagging economy while presenting 100-day action plans to the government on Friday.
"With inflation down there is no reason to keep the key policy rates high," CII president Venu Srinivasan said, adding that interest rates in India remain high compared to many other economies. He said the key policy rates should be cut by at least 50 basis points.
Also pitching for lower interest rate regime, Ficci president Harsh Pati Singhania said, "Interest rates should come down to single digit levels even for micro, small and medium enterprises."
Faced with high borrowing rates and demand slowdown,industry chambers have presented separate 100-day action plans to the government asking for steps to restore the economy back on high growth trajectory.
CII's key recommendations include monetisation of fiscal deficit and reducing interest rates to counter large government borrowings which are negating efforts of RBI.
"It is imperative that the government takes concrete steps in strengthening policies that will promote employment and growth across key sectors along with driving investment in infrastructure and manufacturing," Srinivasan said.
Ficci in its action plan asked the government to address the triple challenge of restoring economic growth at 9 per cent mark, ensuring national security and improving governance at all levels.
"Clearly, the government needs to take definite action on six major fronts," Singhania said, adding that it includes embarking on an investment-led growth strategy through higher public and private sector investments.
Asking for lowering and simplification of taxes, Ficci presented a sector-wise action plan including agriculture, manufacturing, infrastructure, education, housing and fiscal measures to Prime Minister Manmohan Singh.
The Prime Minister Office has started working on the 100-day action plan for the new government and at the same time different ministries are also finalising priority programmes for the first three months.
Chambers, industry captains and representatives of other trade bodies would be meeting finance minister Pranab Mukherjee on Monday in a pre-budget consultation. The government is likely to present the budget in the first week of July.
