Green shoots in the rural economy, monsoon augurs well: CII President

There has been some pick up in rural consumption and the monsoon is expected to further help the revival of the rural economy, said Sanjiv Puri, president of the Confederation of Indian Industry (CII). He underlined that more measures must be taken to increase the productivity and resilience of the sector as well as create more employment opportunities.

“We are seeing some green shoots of pick up in the rural economy. The monsoon is better, which will help have better crops, and this augurs well for the rural economy,” he said in response to a question on Thursday.

The newly-elected CII President noted that the problems in the rural sector are due to extreme weather events and there is a need to strengthen productivity and build resilience in agriculture. He also underlined the need to empower the youth in rural areas with new-age skills and promote rural entrepreneurship.

Upbeat about economic prospects, the industry body expects GDP growth of 8% this fiscal. “While the growth estimate is above consensus, the experience of previous years is that India has outperformed initial estimates by a wide margin,” Puri said in his first media interaction since taking over as CII President. “The growth estimate hinges critically on addressing the unfinished reform agenda on priority, in addition to improvement in world trade prospects aiding our exports, twin engines of investment and consumption doing well and expectations of a normal monsoon among other factors,” he underlined.

As part of a 14-point agenda for the new government for driving the next phase of economic transformation, CII has also proposed concerted focus on agriculture by building consensus between the Centre and states on agri reforms by setting up an Inter State Agri Reform Council. “Steps such as launch of new converged programs for producer collectives to boost farmers’ income; developing warehousing infrastructure to reduce waste; setting up a National Grid for Market Intelligence and Crop Planning; adoption of technology in agriculture and pursuing stable agri-export policy require due attention,” it further said. It has also suggested industry engagement with the National Rural Livelihood Mission; developing rural industrial parks; launching smart village programme are some suggestions to strengthen rural development.

CII’s other recommendations for the new government include continued tax reforms such as laying down a roadmap for rationalising and simplifying the capital gains tax and the TDS provisions. On the indirect tax front, it has suggested bringing the goods and services tax (GST) under the three-rate structure with moderation of rates and bringing Petroleum products, electricity, and real estate under GST should be expedited in consultation with the GST Council. It has also called for further measures for ease of doing business.