10% growth possible,asserts India Inc

The Confederation of Indian Industry (CII) feels that India’s growth rate can be stepped up to even 10 per cent if the challenges of inflation and weak delivery mechanisms for basic services such as health and education are indeed addressed. The Survey’s emphasis on deregulating sugar, fertiliser and drugs sectors has been welcomed by FICCI, which believes “its an integral part of the reform agenda.” It has welcomed the survey emphasis on education and health for inclusive growth, hoping that the “Union Budget will allocate adequate funds for giving a fillip to these sectors.”

ASSOCHAM and CII, meanwhile, have expressed satisfaction at the fact that faster economic growth is translating into more inclusive growth. According to them, central governmental expenditure on social services including rural development in total expenditure (plan & non-plan) increased from 10.9 per cent in 2001-02 to 16.4 per cent in 2007-08. The Economic Survey’s prediction of the difficulty in maintaining a 9 per cent growth rate has elicited different reactions from various industry quarters. According to ASSOCHAM president, Venugopal Dhoot, the GDP growth projected at 8.7 per cent for current fiscal is on a realistic path. Further, FICCI agrees that maintaining the growth rate at 9 per cent will be a major challenge and pushing it to double-digit levels would be an even greater task in the context of the slowdown of the global economy and the threat of rising inflation within the country.

While ASSOCHAM shares the survey’s stress on a second Green Revolution to enhance agricultural production, FICCI has said that giving a boost to the farm sector will be of critical importance not only for maintaining growth of GDP but also for price stability.