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31-Dec2018

India to sustain robust GDP growth at around 7.5% in 2019: CII

After India emerged as the fastest growing major world economy this year despite growing global vulnerabilities, the Confederation of Indian Industry (CII), in its 'Growth Outlook for 2019' report, has stated that the country will witness strong economic growth in 2019. It added that the positive outlook is buttressed by strong drivers emanating from services sector and better demand conditions arising out of poll spend, with the general elections slated next year. It highlighted that better demand conditions, settled Goods and Services Tax (GST) implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24% will sustain the robust Gross Domestic Product (GDP) growth at around 7.5% in 2019.

The chamber pointed out that despite 2018 being filled with external vulnerabilities arising out of rising oil prices, trade wars between major global trading partners and US monetary tightening, India outshined as the world's fastest growing major economy. It has identified seven key drivers for growth that need to be fostered and suggested policy actions for robust GDP growth to continue in 2019. Among key growth drivers, CII hopes the GST Council will consider extending the tax to currently exempted sectors such as fuel, real estate, electricity and alcohol.

CII outlined that credit availability has been a challenge, particularly for the micro, small and medium enterprises, as credit flow to industry grew by a mere 2.3% in first half of the current financial year. Besides, the process of insolvency resolution has taken shape, the chamber feels the government should consider setting up additional benches of the National Company Law Tribunal to strengthen the judicial infrastructure for easier and faster exit of distressed businesses.

The industry body further said the government will continue to place high priority on simplifying business procedures in 2019, especially in terms of working with states for grassroots improvements. On agriculture reforms, CII suggested that it is important to persuade states to implement the Agriculture Produce and Livestock Marketing Model Act, which has been implemented in just four states, to strengthen agriculture produce marketing.


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