Industry body CII expects the RBI to cut the benchmark interest rates next month to support sagging growth, its President Sanjiv Puri said on Wednesday and stressed the need to boost job creation through targeted interventions for labour-intensive sectors in the upcoming Budget.
In an interview with PTI, Puri flagged “sticky†food inflation, highlighting the need to build agricultural resilience and de-linking it from the interest rates under the inflation targeting framework, arguing that it is on account of climate change and not really influenced by the monetary policy.
Puri is also the Chairman and Managing Director of ITC.
Finance Minister Nirmala Sitharaman is slated to present the Budget in Parliament on February 1.
The Confederation of Indian Industry (CII) chief also expressed optimism that much-needed labour reforms will be taken up by the BJP-led NDA government in the third term, stressing that it would benefit the economy and create more jobs.
Puri also raised the issue of dumping excess stock by China globally, including India, and urged the government to look at an “accelerated way of implementing minimum import price and anti-dumping duty†for specified sectors like steel, paperboard, chemicals and polymers.
Responding to a question on the potential impact on India after the Donald Trump-led administration assumes office in the US this month, the CII President said we should focus on the areas where there is opportunity and where we can really play on our strengths.
“...Now, what Trump will do, etc. What the US will do? I think at this point of time, it would be very speculative when it happens, that we will address,†Puri said.
He informed that public spending is picking up and consumption should also gain momentum, pointing out that CII expects a rate cut by the Reserve Bank of India (RBI).
“In fact, we are also suggesting that in the inflation targeting framework, I think food inflation should be de-linked from interest rates, from the monetary policy. Food inflation is on account of climate change and not really influenced by monetary policy,†Puri said.
CII recommends setting up some kind of an institutional mechanism to look at labour reforms across a number of sectors, he added.
Puri called for introducing targeted interventions in labour-intensive sectors like apparel, footwear, furniture, tourism and real estate, asserting that tourism could benefit from “infrastructure status†whereas garments can benefit from a Production Linked Incentive (PLI) 2.0 scheme.
CII, in its Budget suggestions for 2025-26, has recommended lowering the excise duty on fuel to boost consumption, especially at the lower income level, arguing that fuel prices significantly drive inflation.
The Budget could also consider reducing marginal tax rates for personal income up to Rs 20 lakh per annum.
