In order to accelerate growth and deal with the impact of the global problems, the PMEAC suggested boosting investment in infrastructure sector, allow foreign airlines to pick up stake in domestic carriers and contain fiscal and current account deficit
New Delhi: Projecting a higher growth rate of 6.7% in 2012-13, Prime Minister's key advisory body on Friday called for bold reforms like increase in diesel prices, cut in fertiliser and LPG subsidies, opening of foreign direct investment (FDI) in multi- brand retail and predictable tax policies, reports PTI.
In its Economic Outlook for 2012-13, the Prime Minister's Economic Advisory Council (PMEAC) said deficient monsoon would pull down agriculture sector growth rate to 0.5% putting pressure on inflation, which has been projected at 6.5-7%.
"Economy is expected to grow a shade better at 6.7% in 2012-13," PMEAC Chairman C Rangarajan said pinning hopes on improvement in the manufacturing sector in the second half of the current fiscal.
Earlier in the day, he presented the report to Prime Minister Manmohan Singh.
PMEAC's growth projection for the current fiscal is much better than the forecast made by the Reserve Bank of India (RBI) and other entities. While the RBI lowered its GDP forecast to 6.5% from 7.3% estimated earlier, Moody's and CRISIL have pegged it at 5.5%.
The economic growth rate, as per the estimates of the Central Statistical Organisation (CSO) plunged to nine-year low of 6.5% in 2011-12. Rangarajan, however, opined that it might turn out to be more than CSO's estimates.
In order to accelerate growth and deal with the impact of the global problems, Rangarajan suggested boosting investment in infrastructure sector, allow foreign airlines to pick up stake in domestic carriers and contain fiscal and current account deficit.
Making a case for bringing about predictability in taxation regime, Rangarajan said efforts were needed to address investor concerns. He was referring to concerns expressed by investors over retrospective amendment to Income Tax Act and the General Anti-Avoidance Rules (GAAR).