Budget 2024: CII wants Modi 3.0 government to push for land, labor and agriculture reforms

Industry body CII on Thursday made the case for the Modi government pushing for 3.0 reforms in sectors such as land, labor and agriculture to accelerate economic growth, which is estimated at around 8 per cent in the current financial year.

CII president Sanjiv Puri said many policy interventions in the past had put the economy on a “much stronger footing”.

“The growth rate this year will reach 8 percent, which will be the fourth consecutive year of growth above 7 percent.

“The growth estimate is largely based on the priority of addressing the unfinished reform agenda, as well as on improving global trade prospects that will help our exports, on the soundness of the twin engines of investment and consumption, and on the expectation of a normal monsoon, among others,” he added.

Expressing optimism about the economy’s performance, he said: “We clearly expect all three sectors of the economy – agriculture, services and industry – to recover and perform well next year.”

He added that the industry body expects inflation to be 4-4.5 percent this year.

Addressing his first press conference after taking over as CII chairman, Puri, chairman and managing director of ITC Ltd, said the private sector investments of concern are solid and cover a wide range of sectors.

“Private sector investment used to be a concern, but the good news today is that it is on the right track… it is solid. Investment dropped to 20.7% of GDP and now stands at 23.8%. this is more than before the pandemic,” Puri said.

On the prospects for rural consumption, Puri said, “We are certainly seeing green shoots of growth in rural (demand)… looking forward to good monsoons and better crops leading to better performance, which bodes well for the rural economy.”

The industry body also suggested rationalizing rates through three slabs and including sectors such as petroleum and real estate, which are currently outside its scope, apart from the state of infrastructure for the hospitality sector.

“As far as GST is concerned, our view is that there can be three slabs and there are areas like oil properties which do not come under the ambit of GST… should be included in GST,” Puri said.

On land reforms, he said CII suggests reducing stamp duty to reduce business acquisition costs and improve efficiency through measures such as setting up a state-level land authority and digitizing procedures.

Puri outlined the new government’s 14-point program to launch the next phase of economic transformation.

Many of the next generation reforms are in state and parallel domains and require strong consensus building to drive them, he said, adding that inter-state institutional platforms could be created on the lines of GST councils.

Employment-linked incentive (ELI) programs with appropriate result indicators could be launched for labour-intensive sectors with high growth potential such as toys, textiles and clothing, timber, tourism and logistics, among others.

The ELI program can also address the low labor force participation rate of women by providing greater incentives to employ women.

Besides, an international mobility authority should be established to monitor employment opportunities in other countries and facilitate Indian youth to avail these opportunities, Puri said.

“Priority should be given to further reducing regulatory and compliance burdens through the simplification, rationalization and decriminalization of regulatory approvals and compliance, timed authorizations using the national single window system, strengthening the alternative dispute resolution system and the adoption of self-declaration/third party certification and recognized approvals where possible,” he said.

He also recommended interventions in the areas of land, energy and logistics to reduce the cost of doing business.

CII also advocated further support for tax reforms to improve the investment climate. On direct taxes, the government may consider developing an action plan to rationalize and simplify capital gains tax and TDS provisions, the CII chairman added.