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CII draws heart from PM’s statement on roadmap ahead for Indian economy

New Delhi, Aug.31 (ANI): The Confederation of Industry (CII) has said that it draws heart from Prime Minister Manmohan Singh’s statement on the roadmap ahead for Indian economy.

CII president S Gopalakrishnan said the business chamber agrees with the Prime Minister that the rupee is undervalued, and drew heart from his assurance that capital controls would not be resorted in an effort to contain depreciation of the currency.

“The target of achieving 2.5 percent current account deficit is welcome, however, a roadmap would provide confidence to industry,” he added.

“CII hopes that the political leadership would come together to further the cause of the “difficult reforms” like the insurance and pension bills, GST, reduction in subsidies, etc,” Gopalakrishnan said.

“In the meantime, CII urges the government to fast track implementation of stalled projects as a quick measure to revive the investment cycle, even as industry expects RBI to ease rates in the September review of monetary policy,” he said.

Gopalakrishnan’s reaction came after Prime Minister Manmohan Singh had told both Houses of Parliament on Friday that while the fall of the rupee value to the dollar is a matter of great concern, the Central Government is taking steps to reduce current account deficit and added that growth will improve in the second half of fiscal 2013-14.

“There are concerns and justifiably so on how rupee fall will impact economy, the movement of the rupee recently is a matter of concern to the government,” Dr. Singh told the Lok Sabha while making a statement on the current economic situation.

“What triggered the sharp depreciation in Rupee value was due to certain external forces.We need to reduce our appetite for gold, economise the use of petroleum products and take steps to increase our exports,” he said.

“The rupee is also getting hit due to high current account deficit. Huge cost of gold and oil imports is also current account deficit. The government is taking steps to reduce current account deficit,” he added.

Dr. Singh further said: “To some extent, depreciation can be good for the as this will help to increase our export competitiveness and discourage imports.”

Urging political parties to work towards and join in the Government”s efforts to put the economy back on the path of stabile growth, Dr. Singh said: “The easy reforms of the past have been done. For more difficult reforms, we need political consensus.”

“It cannot be denied that the country is faced with a difficult economic situation. And there are several causes. I do not deny that there are some domestic factors but there are also international factors arising out of the changes in the US monetary stance,” Dr. Singh said.

“There are also problems created by the new tensions that are on the horizon in Syria and they have inevitable consequences for oil prices. So we have to reckon with all those uncertainties. I will be very happy to make a statement tomorrow. I need some time to reflect on what I have to say, but I would be quite happy to make the statement tomorrow,” he added.

The opposition, however, said that the Prime Minister’s statement on the economic crisis was an admission of the UPA regime’s failure on many fronts. (ANI)