India placed better than world economy: Assocham

Contrary to the views expressed by rival chamber FICCI, Assocham on Monday asked corporates to shun the sense of negativity conveying an impression as if nothing is going right for the economy.

“The entire world economy is facing the headwinds and Indian economy is certainly not off limits,” Assocham President Rajkumar Dhoot said.

Terming the economic situation as “grave”, FICCI asked the government to go in for bold steps like allowing FDI in multi-brand retail, cut in interest rates and halt funding of welfare activities to revive growth.

Hit by global woes and domestic problems, India's economic growth rate slowed to a nine-year low in 2011-12 registering growth of 6.5 per cent. However, Finance Minister Pranab Mukherjee in his Budget speech had pegged the GDP growth in 2012-13 at 7.6 per cent (plus, minus 0.25 per cent).

Assocham said there is no doubt that the Indian economy has been facing sort of a bumpy ride over the past few months.However, it said, creating a negative impression is unfair to the inherent strength that our economy has shown in the past. Also, it is not the first time that the growth has decelerated.

Further, Assocham said, unfortunately the government finances are not in a healthy situation and the fiscal balance is delicately poised.

“Under the given circumstances, there is a pressure on the government to cut its subsidy bill and maybe it is advisable to deregulate the diesel sector,” Assocham Secretary General D S Rawat said.

Also, there are differences of opinions on issues like Goods and Services Tax as there is a coalition government in Centre and in several states, he added.

The chamber said under such a precarious global situation, it would not be fair to judge Indian economy solely and blaming it all on the so-called policy paralysis as there is a sense of pessimism across the globe affecting demand.

“Thus, we have to face the situation in a bold manner and not get swayed by the negativity around us,” Dhoot said.

The chamber urged the government to give a push to manufacturing sector and to clear the big time infrastructure projects maybe in the next three months.