According to the industry body, stalling of the growth process and policy inactions hurt the common people the most and what we lose in the process are valuable jobs and sources for generating income
Terming the economic situation as ‘grave’, industry body Federation of Indian Chambers of Commerce and Industry (FICCI) on Monday asked the Union government to go in for bold steps like allowing foreign direct investment (FDI) in multi-brand retail, cut interest rates and halt funding of welfare activities to revive growth, reports PTI.
“India is in the midst of a grave economic crisis. The combination of low growth, high inflation, high fiscal deficit and the highest ever trade account deficit has raised a lot of concern,” FICCI president RV Kanoria told reporters in the capital.
Suggesting a 12-point agenda, Mr Kanoria said during the time of low growth and global uncertainties, all the political parties should strengthen the hands of the policy makers.
“There has to be a clear recognition on the part of ruling and opposition parties that we are in crisis situation and all parties need to stand united and strengthen the hands of policy makers to take bold decisions and act pro-actively and decisively,” he added.
He said that reasons like excessive monetary tightening, delays and uncertainty over key economic legislations, projects delays on account of factors including stalled environmental clearances have pulled down the country’s economic growth.
India’s GDP (gross domestic product) growth has slumped to 6.5% in 2011-12, the lowest in the last nine years.
The chamber has suggested that the timely implementation of Goods and Services Tax (GST) would be a major landmark reform that could alter the dynamics of Indian industry and exports. “It would add 2% to our GDP. Tax administration and tax collection will also go up,” he said.
Besides, he asked for immediate easing of monetary policy and lowering interest rates by two percentage points and CRR by one percentage point. Cash Reserve Ratio (CRR) is the portion of deposits which banks are required to keep with the RBI.
“It is acknowledged that inflation in India is largely a supply side problem. To deal with such a problem using monetary tools may not be the right approach,” Mr Kanoria said.
He also asked to revisit the Land Acquisition Bill, as the bill restricts the use of irrigated multi-cropped land for infrastructure development.
He recommended providing fiscal stimulus for investments across sectors.
“The government must ensure that these proposals (allowing FDI in multi-brand retail and allowing foreign airlines to take stake in domestic carriers) reach their logical conclusion as both these measures would enhance overall growth in the economy,” the Ficci president added.
Mr Kanoria also asked the government to decontrol the prices of diesel and other oil products and “the government can also consider imposing a higher duty on imported diesel cars”.
Mr Kanoria said that repatriation of black money immediately could help in mitigating the balance of payment situation.
“The White Paper brought out by the government on the issue alludes to a scheme whereby some governments between themselves have entered into special administrative agreements for revenue sharing,” he said.
The government should urgently hold discussions on this subject and arrive at a methodology in a time bound manner to enter into similar agreements, he added.
Further, he said the government should “eschew the temptations of a premature welfare state and announce an immediate moratorium on any additional expenses on doles”.
The sums already allocated for welfare schemes should be distributed in an efficient manner as envisaged under the 'direct transfer of subsidies' programme linked to the Aadhaar platform, he said.
Mr Kanoria urged the RBI to cut repo rate by one percentage point in the forthcoming monetary policy review.
On Land Acquisition Bill, he said if the conditions in the Bill come into force “we will find it extremely difficult to achieve the targets that we have set for ourselves for investments in infrastructure and manufacturing. The consequent impact on job creation will be devastating”.
Besides, he said the slowdown in growth in investments is deeper in case of the private sector and this trend must be reversed.
“We urge the government to look at measures such as providing accelerated depreciation and scrapping MAT for infrastructure projects as all of these would give a fillip to investment activity,” he added.
Here is the 12-points agenda by FICCI for stimulating Indian economy's growth...
Home Ministry had no objections on removing the roaming charges but wants roaming facility to be restricted in certain regions and circles due to security considerations
New Delhi: The 'one-nation-one-number' provision, which exempts users from paying roaming charges under the National Telecom Policy 2012 (NTP-2012), will not be applicable in areas like Jammu and Kashmir and the Northeast where Home Ministry has imposed restrictions on providing roaming facilities to pre-paid mobile subscribers, reports PTI.
In a slew of objections over the NTP-12, which was passed by the Union Cabinet last week, the Home Ministry has also asked the Department of Telecom (DoT) to ensure that in all policies related to number portability, law enforcement agencies are consulted.
On 'one-nation-one number' policy, the Ministry said it had no objections on removing the roaming charges but restrictions on roaming facility may have to be imposed in respect of certain regions and circles on security considerations from time to time.
The policy will not be applicable in restricted areas like Jammu and Kashmir and the Northeast as Home Ministry has imposed restrictions on providing roaming facilities on pre-paid mobile subscribers.
Among the nine issue pointed out by the Ministry in its note about the NTP-12, Voice over Internet Protocol (VoIP) also figures prominently.
"Enabling and enforcement of VoIP facility, Ministry of Home Affairs (MHA) and law enforcement agencies should be consulted suitably at implementation stage," the note said.
Mushrooming of unregistered VoIP or Internet Telephony has become a security problem as the origin of caller and time of call cannot be ascertained prompting central agencies to ask service providers to come up with a solution within a month.
There have been series of meetings of security agencies with DoT, National Technical Research Organisation and service providers have failed to come up with any solution to block the unregistered VoIP, who operate from outside the boundaries of the country.
Now under NTP-12, the service providers have to work out a solution for real time interception and providing exact information of its origin of VoIP, the sources said.
Central security agencies have expressed concern over the lack of real time monitoring of communication exchanges taking place over the Internet and that telecom operators were not providing them the real time data of these conversations which is a security risk, they said.
The Ministry also informed the DoT of its previous note where the Telecom department had agreed to the Home Ministry's stand that long term security lies in an increased production of critical components (both hardware and software) in India.
The MHA also asked DoT to set up national test bed capabilities where all tests of imported components to check malware can be done within next two years as agreed in earlier meetings.
GMR-led DIAL said it won the bid to development Delhi airport through a global tender where terms like concessional land and usage of 5% of airport land for commercial purposes were available to all bidders
New Delhi: Questioning the jurisdiction of The Comptroller and Auditor General (CAG) which had detected a loss of Rs1.63 lakh crore in the leasing of land to GMR-led private operator, the Delhi International Airport Pvt Ltd (DIAL) on Monday said the concessions available to it to run the Delhi airport were part of the bid documents and were available to every bidder, reports PTI.
CAG, in its draft audit report which is yet to be tabled in Parliament, states that DIAL could earn Rs1.63 lakh crore over a period of 60 years from land that leased out for a mere Rs100 per year.
"At the outset we would like to state that DIAL, being a public-private partnership, does not come under the purview of CAG audit," DIAL said in a statement.
GMR-led DIAL said it had won the bid to development Delhi airport through a global tender where terms like concessional land and usage of 5% of airport land for commercial purposes were available to all bidders.
"The bid process and conditions were reviewed and upheld by the Supreme Court of India in 2006," it said.
Stating that the figure of Rs1.63 lakh crore as value of land was "theoretical and grossly misleading", it said the amount of revenue accruing to DIAL over 58 years does not represent the time value of money.
"It (Rs1.63 lakh crore) is simply the absolute amount of revenues that accrue to DIAL over 58 years (45.99% of the same will be shared with Airport Authority of India) and does not represent the time value of money. The net present value of this land would be only Rs4,547 crore (about Rs19 crore per acre)," the statement said.
On CAG's criticism of Civil Aviation Ministry allowing DIAL to charge airport development fees (ADF) from air passengers in violation of agreement, the operator said development fee is a form of pre-funding that is globally applied in number of airports.
"ADF is permitted under Section 22A of the AAI Act and this was known to all bidders. Hence this was not a post bid change," it said.
CAG had stated there was no mention of a development fee in the original bid and levying of such a charge violated the Operation Management Development Agreement (OMDA).
GMR-led DIAL said the levy of development fee was necessitated on account of inability of AAI to infuse further equity and lenders not willing to provide further debt.
The imposition of the development fee on passengers at Delhi airport came under attack in the Rajya Sabha last month with CPI-M, BJP, SP and BSP members questioning the levy for incoming passengers.
"For DIAL, it must be noted that, amount of DF levied directly reduces the basis used for calculating the aeronautical tariff at the airport to be charged from passengers and airlines," the statement said adding passengers and airlines would have else been paying 200% of additional tariff hike.
"As a result, DF is actually detrimental to DIAL as it meant a loss of nearly Rs 546 crore of revenue per year," it said adding DIAL has delivered world class infrastructure in fulfilment of its commitment under the concession document.