CII welcomes fiscal package and 4 cut in excise duty

Welcoming the fiscal stimulus package announced by the government, the CII president, K V Kamath said that `with the fiscal package and the monetary policy announcements made by RBI yesterday, the authorities are sending a clear message from the government and the regulators that a multi pronged approach is being adopted to ensure that the impact of the global slowdown on India is managed in an orderly way and India continues to record reasonable growth rates. This package is welcome`.

Kamath went on to say `this package does address the issues of the MSMEs and exporters to a large extent and the across the board cut in excise duty by 4% would help the manufacturing sector. We would need additional measures and quick implementation in the infrastructure sector.`

The key to keep India a vibrant economy is to ensure that domestic spending is not allowed to slacken. More than two-third of the economy is accounted for by domestic spending and therefore, at a time like this, a significant boost to spending is required. While the Rs 200 billion additional outlay would help, CII is of the view that the government needs to target up to 2% of the GDP as additional spend, which amounts to approximately Rs 1,000 billion.

Further, there is a critical need to facilitate domestic private investment and household consumption and asset creation through credit availability at lower rates of interest, for which easy and uninterrupted liquidity and addressing of cash flow pressures of borrowers is an essential prerequisite. This would require further monetary and regulatory measures including injection of additional liquidity, CII said.

Expressing hope that this is only the first tranche of the overall fiscal stimulus package, CII said that there are other sectors like automobiles, transportation, chemicals, etc, which also require supportive policy measures and therefore, CII hopes that the government would announce the rest of the fiscal stimulus package soon.

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CII welcomes fiscal package and 4 cut in excise duty