CII pegs India's FY22 GDP growth at 9.5%

New Delhi, June 17 Industry body CII on Thursday pegged India's GDP growth rate for 2021-22 at 9.5 per cent.

"Ultra-high frequency indicators strongly presage growth recovery following the second wave of the pandemic," said T.V. Narendran, CEO and Managing Director of Tata Steel, who took charge as President CII on May 31, 2021.

"With recent uptick in mobility indicators, traffic congestion index and daily railway passenger movement, we believe that 9.5 per cent growth rate can be achieved this year."

According to Narendran, growth needs to pick up to 9 per cent by 2024-25 with public expenditure, reforms and vaccination as key levers.

"The cumulative impact of the two waves on incomes and consumer sentiment, coupled with the increase in household medical expenses in the second wave, is likely to affect consumer demand for some time."

"As the economy reopens post the second wave, a dual-pronged Government strategy is required to boost consumption and support industry till demand is well-entrenched."

Besides, he called for a strong fiscal stimulus and government's expenditure programme.

"CII estimates that there is fiscal headroom of up to Rs 3 lakh crore and this amount can be channelised towards direct cash transfers to the vulnerable people, higher allocation for 'MNREGA, short-term GST' rate cuts and lower excise duty on fuel."

Furthermore, he said that demand can be revitalised through a time bound tax concession of interest rate subvention for home buyers, a LTC cash voucher scheme as done last year and extending the Atmanirbhar Bharat Rozgar Yojana till March 31, 2022.

Additionally, CII urged for expansion in the Reserve Bank of India (RBI) balance sheet to meet the demand exigencies of the pandemic.

In addition, Narendran called for support to industry through increase in 'Emergency Credit Line Guarantee Scheme' (ECLGS) to Rs 5 lakh crore along with extension of the scheme to March 31, 2022 and inclusion of more distressed sectors such as retail.