Slashing imports, augmenting exports and reviving investment in key infrastructure sectors by offering them tax breaks will help turnaround the economy and bring growth to over 7 per cent, an Assocham panel has said.
"The strategy aims at drastic cuts in avoidable imports and finding alternatives in steel, coal and hydrocarbons while making exports free from procedural delays and incentivising them," Assocham's National Economic Affairs Council said in its Turnaround Plan.
India's crude oil imports in 2012-13 were to the tune of USD 144 billion. This level is exerting a huge pressure on the current account deficit (CAD), which adds to the problems of the macro-economy, the council said.
The council, headed by industry leader and educationist Sushma Berlia, also called on the government to revive investment into key infrastructure sectors such as power, road and port by offering them tax breaks.
These measures, the council said, will help achieve economic expansion and also enhance supply of goods and services, thereby taming high inflation. However, they should be implemented before the end of the current fiscal, it said.
For expediting project clearances, the council suggested setting up a body at the state level on the lines of the Cabinet Committee on Investments (CCI) at the Centre.
"The CCI initiative at the Centre has benefited by unclogging around 100 mega infrastructure projects. A similar institutional set-up should be tried at the state level," the council said in its strategy paper.
Among other measures, the council suggested cutting CAD by reducing imports of gold through setting up a Gold Bank.
“The government or RBI can set up a Gold Bank which can procure and retain gold abroad through offshore foreign currency borrowings, linked to Libor rate," the council said.
Besides, the council has recommended exemption from levy of MAT (minimum alternate tax) on the profits earned by infra projects to encourage investments.