Newly elected CII President Sanjiv Bajaj on Monday said that India’s GDP growth is expected to be in the band of 7.4% to 8.2% in 2022-23 with the outlook critically hinging on the trajectory of global crude oil prices.
‘’Global headwinds and inflation will have to be countered with robust policy reforms, both domestic and external sector reforms, to unlock the growth potential of the economy. Tailwinds that are supportive of growth in the short-term include government capex, private sector investment which is showing an uptick aided by strong demand in some sectors and the PLI push in the others, good agriculture season on the back of the expectations of a good monsoon and positive export momentum,” said Bajaj.
According to Bajaj, an immediate measure to moderate inflation could be to moderate taxes on fuel products, which constitute a large share of the retail pump prices of petrol and diesel. “CII would encourage Centre and State governments to collaborate in reducing these duties,” he said.
Spelling out the vision for the economy, Bajaj said that India has the potential to become a $40 trillion economy by the time it turns 100, in 2047, with milestones at $5 trillion by 2026-27 and $9 trillion by 2030-31.
Highlighting the sectoral drivers of growth, Bajaj elaborated that manufacturing and services will be the twin engines of growth. The enabling policies of the government, particularly the PLI scheme, are expected to push the manufacturing sector’s contribution in GVA to 27% by FY48. Similarly, Services, too, will witness its share rising from 53% to 55% in the terminal year. The contribution of exports to GDP must rise while the investment rate must be stepped up. Both government and industry must be equal partners in achieving this.
Bajaj outlined a 10-point agenda for the government which makes a case of increase in expenditure by central and state governments on public health & education to make these services accessible to all. India should focus on scale and technology to power Atmanirbhar Bharat.
CII has suggested measures such as enabling the NBFCs to offer full banking services, deepening the corporate market, increasing insurance penetration among others are important to finance the Indian economy’s journey on a high growth path. Lending capacity of The National Bank for Financing Infrastructure and Development (NaBFID) also needs augmentation, for supporting both physical and soft infrastructure.
