CHENNAI: Shobana Kamineni, president of the Confederation of Indian Industry, has sought a new industrial policy as the existing one is more than 20 years old and doesn’t factor in new industries such as e-commerce.
“We are working on an industrial policy which was crafted in the 1990s. There seems to be so much happening in the industry including the presence of e-commerce (companies) and the existing businesses need new ways of working and the lines between manufacturing and services are blurred,” she said.
According to her, conditions are positive for further strengthening of the economy in the current year. The global economic environment is gaining momentum with long-awaited periodic recovery in investment, manufacturing and trade. The domestic demand is recovering and is expected to drive agricultural performance and rural demand. If these positive trends continue, investments would take off by the end of the year, she noted.
Kamineni has predicted a 7.5- 8 per cent growth in GDP in three years based on ‘normal monsoon, good global climate and strong macro fundamentals of the country. “However, there are a few challenges that need to be sorted out... we have been facing subdued domestic investments, a flagging industrial production and a weak credit growth.
A quicker resolution of these issues will help lift growth. As important reforms are being implemented to drive greater formalisation of the economy, the economy’s growth rate has the potential to increase by one per cent annually in the next three years,” she added. For investments to pick up, it is important for banks to start lending again, she said. She has urged the RBI to consider the low credit offtake and subdued investment and also the liquidity in the system as factors in reducing interest rates. The CII president also emphasised that the services sectors such as tourism, healthcare, and retail have huge employment potential with higher incomes.