R. Dinesh, President of the Confederation of Indian Industry (CII), underscored the necessity for collaborative efforts between the central and state governments to implement significant reforms in the labor and land sectors, thereby stimulating economic growth. He highlighted findings from a CII survey, indicating an anticipation for the Reserve Bank of India (RBI) to reduce benchmark interest rates during the second quarter (July-September) of the fiscal year 2024-2025. Notably, the RBI has maintained the repo rate at 6.5 percent since February 2023.
Dinesh stressed the importance of fostering consensus among all states, proposing a framework akin to the federal structure of the Goods and Services Tax (GST) regime to facilitate coordinated action between the Centre and states in pursuing substantial reforms. Discussing private sector capital expenditure, he noted that while its percentage remains consistent, a CII survey on capacity utilization revealed that all major sectors are operating at levels exceeding 75 percent.
Furthermore, Dinesh pointed out that although private sector capital expenditure persists, its growth rate may not match that of government spending. He commended the RBI for adeptly balancing the twin objectives of controlling inflation and supporting economic growth. He referenced a CII survey indicating an expectation for interest rates to decline by the second quarter of fiscal year 2024-2025, attributing this projection to the central bank’s prudent management.
