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New Delhi, Feb 9 (IBNS) Concerned over prospects of a sharp deceleration in the Gross Domestic Product (GDP) growth for the current financial year, ASSOCHAM president Rajkumar N Dhoot made a strong plea to Prime Minister Manmohan Singh to immediately call an all-party meeting before the Budget session of Parliament to find a political consensus on the key economic issues which are blocking the push so urgently needed to revive the economy.
“I urge the Prime Minister to take a major political initiative so that inter-party differences over some critical issues like the Goods and Services Tax and the Direct Tax Code, as also other important economic bills pending in Parliament are resolved even before beginning of the Budget session,” Dhoot said in a statement.
He said the advance estimates pegging the GDP growth at five per cent, a decade low, is very disturbing for the industry and the overall economy.
“Not that we are surprised too much. After all the signals were all there. But then, the corrective actions, though taken in the recent few months, should be enforced with a speed and a serious sense of purpose. Besides, let economy not be a big war for the political parties even though it is expected of them by the electorate to raise concerns of common-man like inflation,” he said.
Dhoot said a pathetic performance by the manufacturing sector calls for urgent and resolute action.
"The sector is set to grow just by 1.9 per cent and it has implications for the employment as the vicious effect is also being felt on the investment cycle. A fast decline in the rate of capital formation is a clear pointer. The entrepreneurs’ appetite for investment has disappeared and risk aversion has become order of the day not only by the entrepreneurs but also by the decision-making bureaucracy," he said.
He said even if the CSO has gone over-board in projecting a lower growth, there is no denying the fact that the growth is certainly decelerating at a fast pace.
ASSOCHAM chief further said, though there are many global factors responsible for the slowdown, yet all the blame can not be passed on particularly in infrastructure sector or the exports, which have shown deceleration for the eighth month in a row.
"Most of the infrastructure companies in the power, roads, airports, heavy machinery building sectors are facing order crunch as investment commitments are not being pursued."
Dhoot said in the medium to long term, this tendency has even more dangerous implications. Less of investment will result into bigger supply constraint which would then lead to further inflation.
“I am sure, we do not want that kind of a disastrous situation,” he said.
The ASSOCHAM president also appealed to major political parties- several of whom are ruling in several states- to rise to the occasion and avert the national economic gravity, waiting to take place.
After all, the consequences are grave in terms of job-cuts, which we can ill-afford, he said.