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Call for focus on infrastructure and agriculture

Staff Reporter

Assocham suggests steps to contain inflation

KOCHI: While concurring with the estimates that the GDP growth will exceed over 8 per cent in the current fiscal, the Associated Chambers of Commerce and Industry of India (Assocham) has said that solid policy measures will be needed to sustain the projected growth rate.

The Assocham has called for special focus on infrastructure, agriculture, oil sector reforms.

Assocham president Anil K. Agarwal said in a communication that while the economy functioned reasonably well in the first 11 months of the current fiscal, the Government should lay stress to contain inflationary trends so that inflation does not go up to 5 per cent as projected in the economic survey and interest rates are contained within the manageable limit of 8 per cent. The investment rate, which has been currently pegged at 31 per cent of GDP, should go up at least to 35 per cent and more efforts are needed so that current account deficit, which surfaced during 2005-06 after a gap of three years, disappear and trade deficit also decreases, he said.

The Assocham chief felt that bold policy reforms are required to generate the estimated investment requirement for infrastructure sector, which alone needs Rs.1,74,000 crores by 2012. This apart, Rs.40,000 crores are required for airports by 2010 and Rs.50,000 crores needed for ports by 2012. The investment could be attracted through bold and transparent policy initiatives through public-private partnership.

Although the agriculture growth has been estimated at 2.3 per cent and food grains production output has gone up by 5 million tonnes in the economic survey, in order to maintain the GDP growth of 8 per cent at sustained level, the agriculture sector will have to grow at 4 per cent or more.

Assocham also feels that the Government should focus on labour reforms and take all possible measures so that fuel price led inflation is restricted and exports go up. Assocham said procedural bottlenecks in all sectors of Indian economy should be removed so that the current growth momentum of the economy is not dampened.

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