New Delhi: The top honchos of India Inc, who met with Prime Minister Narendra Modi Tuesday, highlighted the need for lower cost of capital to boost investments, propping up rural demand and more measures for ease of doing business.
In a meeting called to deliberate on how India can seize the opportunities that have emerged in the wake of a slowing Chinese economy and guard itself from adverse effect of recent global volatility, industry bodies suggested steps to tackle the turmoil and outpace other emerging economies.
CII said the two biggest issues are reviving demand and introduction of GST for higher economy-wide competitiveness.
"It is important that India does not get clubbed with other emerging economies. India's economic fundamentals and current performance are superior to its peers," CII President Sumit Mazumder stated.
"The Prime Minister said this is an opportunity for us to take advantage and invest... Cost of capital is too high, but I don't know how many people can go ahead to take risks and invest... Many of us raised the issue of interest rate," Ficci President Jyotsna Suri told reporters after the meeting of the Prime Minister with CEOs, bankers, economists and bureaucrats.
In a statement, CII pointed out that exports would be a "key concern" in the current environment to counter the global demand slowdown as India should target rural demand at home by investing in agriculture, irrigation and rural infrastructure.
Suri stressed on the need to push India's global competitiveness in the current environment.
"While we should continue to market India as an attractive investment destination under the Make in India campaign, it's equally important to encourage domestic investments," she stated.
Assocham President Rana Kapoor said the Prime Minister asked industry to "catalyse risk-taking ability".
In a set of recommendations submitted by Kapoor to Prime Minister to "maximise" the Indian economy, Assocham suggested that there was room for monetary easing to the extent of 75-125 bps over the next 7 months.
It recommended that in a subdued world trade environment, India should prevent any real appreciation in the rupee.
Assocham suggested investment revival by prioritising project clearances, protecting domestic industry from 'dumping' through adjustment in duties and FDI-FII fungibility in the banking sector through a composite cap to aid import of lower, effective cost equity capital, among others.
Ficci's Suri said the talks during the meeting centred on how to push domestic investments, boosting infrastructure, skill development, promotion of start-ups and lowering the cost of capital to push up investments.
"We have requested that cost of capital be reduced, infrastructure development be expedited and tax incentives be provided to budding entrepreneurs," Suri said.
