Centre, States Need to Come Together on Big-ticket Reforms in Labour, Land: CII

The Centre and states need to come together to pursue big-ticket reforms in labour and land sectors to accelerate growth, CII President R Dinesh said on Thursday. 

A survey by CII, he further said, expects the Reserve Bank of India to cut benchmark interest growth in the second quarter (July-September). The RBI has been holding the repo rate at 6.5 per cent since February 2023. 

In an interview with PTI, the CII President shared the industry body's perspective on reforms needed to realise India's growth potential to the fullest. 

"From CII's side when we look at accelerating the rate of growth or making sure we are able to seize the opportunities we are being presented today, broadly we are speaking about 3-4 areas, first you look at big-ticket reforms that are land, labour and to a certain extent agriculture," Dinesh said. 

He highlighted the importance of building a consensus across all states. 

Towards this, he said, CII has suggested, a structure which can make the Centre and the states work together to work on big-ticket reforms. A "GST-type federal structure" can make the Centre and the states work together to work on big-ticket reforms. 

Elaborating on the capital expenditure by the private sector, Dinesh said while its percentage continues to be the same, and CII survey on capacity utilisation revealed all major sectors are estimated to have levels above 75 per cent. 

"If you look at private capex spend I think it is important for us to understand that the percentage of private capex continues to be the same, we are between 36-37 per cent, so it is happening, it is not that it is not happening at all, the rate of growth of that capex may not be same as the rate of growth of government spending," Dinesh said. 

Emphasizing that the RBI has been "very correctly and nicely" managing the balance between inflation and growth requirements of the country, the CII President said, "As an industry body we did a survey where we saw that by Q2 of FY25 the expectation is that you will actually see a reduction in interest rates happening".