ICC Theme for the year 2012-‘13
Estimates released by the Central Statistics Office (CSO), place GDP growth for 2011-12 at 6.9%, only marginally higher than the 6.7% growth seen in 2008-09, the year of the global economic crisis. Worst affected is clearly investment, which underwent a mild 0.2% contraction in April-December 2011 in year-on-year terms, relative to a growth of 8.9% in the same months of 2010-11, reflecting a dampening of business sentiments and the pace of execution of various projects. In fact, India's annual economic growth rate slumped in the January-March 2012 quarter to a 9-year low of 5.3 % as the Manufacturing sector contracted and the rupee continued to fall against the dollar. Uncertainty about demand conditions given the global outlook and its likely contagion effect; regulatory issues including environmental clearances and land acquisition; as well as sector specific factors like availability of coal and iron ore have impacted investments negatively. Other contributory factors included an increase in interest rates to dampen high inflation and a slowdown in decision-making in various crucial areas like allocation of coal blocks. At the same time, while fiscal policy remains expansionary, higher outgo toward items of non-plan revenue expenditure such as subsidies, limited the fiscal space available for boosting infrastructure spending by the public sector. Investment growth is likely to remain sluggish in 2012-13 as well, unless policy issues are addressed and there is a substantial pick up in the pace of implementation of big ticket economic reforms. To counter slow growth and low investor confidence, and put the economy on the right track, we need require better targeting of food and fuel subsidies ; fast track implementation of fundamental reforms in taxation like Direct Tax Code (DTC) and Goods and Service Tax (GST) ; deregulation in diesel prices ; fast implementation of Schemes related to expanding bank licences ; FDI in multi-brand Retail, 49% FDI in Civil Aviation & Insurance sectors, etc.
It is without any doubt that India needs big ticket reforms to take the economy out of the low growth blues, and broad consensus is necessary to revitalize the economy in the short run. Accordingly, the ICC has set it’s Theme for the year 2012-’13 as -
L - Leadership initiatives for
E - Enabling Infrastructure growth
A - Accelerating reforms & key policy measures
P – Powering Competitiveness & Skill Development
The Chamber feels driving Leadership Initiatives to boost Infrastructure and accelerating reforms, would be extremely important, and will focus on these critical areas during the year. Powering Skill Development for enhancing Competitiveness would also be another focus area.