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Industry body Assocham today suggested that the government raise investment in agriculture, cut back on subsidies, aggressively disinvest and roll out tax reforms like DTC and GST to revive economic growth.
"We strongly believe economic growth will revive in the second half of FY 2014, drawing support from the lagged impact of remedial measures already announced and those to follow," Assocham President Rana Kapoor said.
Referring to Finance Minister P Chidambaram's 10 commandments for growth revival, Kapoor said the government must raise investment in agriculture from below 3 per cent at present to over 5 per cent by the end of the ongoing Five-year Plan (2012-17).
He also suggested that the Centre adopt an 'expenditure switching' policy, to achieve the fiscal deficit target of 4.8 per cent by cutting back on subsidies and boosting Plan capital expenditure.
Kapoor said the government should execute divestment agenda according to plan and lay out a credible time-bound roadmap for roll-out of the much-awaited Goods and Services Tax (GST) and Direct Taxes Code (DTC).
Moreover, as a short-term measure, the government must issue dollar-denominated NRI bonds to build forex reserves.
To boost exports, government should lower cost of export credit, Kapoor said.
Lauding the steps taken by RBI Governor Raghuram Rajan, Kapoor said: "The steps announced are aimed at ameliorating the concerns on funding of CAD and as such are likely to be positive for rupee. The display of RBI's clarity in thought and alacrity in actions is very inspiring for all stakeholders of the economy".
New RBI Governor Raghuram Rajan yesterday came out with a slew of measures, including more trade settlement in rupees to rescue the battered financial markets.