The Confederation of Indian Industry (CII) said on Thursday the country's gross domestic product (GDP) is expected to grow at 9.5 per cent in the current financial year (FY 2021-22).
This will take the GDP to a level that is slightly higher than in FY20.
"The strong growth in the second-half will be supported by robust external demand and large scale coverage of vaccination allowing resumption of economic activity," said CII President T V Narendran.
"In the medium term, the growth rate can pick up to 8 to 9 per cent if positive actions are taken now. If not, a 5 to 6 per cent growth scenario is also possible," he said while addressing a press conference here.
Narendran said the second Covid-19 wave impacted economic activity in the April to June quarter. A high proportion of employees across businesses were affected by Covid 2.0.
Rising medical expenditure has squeezed incomes and demand. But recovery is on the cards. Global growth and macroeconomic stability will support trade and investment flows.
Besides, there is acceleration in the vaccination programme.
Narendran said both rural and urban unemployment have shot up to double digit levels, impacting livelihoods across the country. Suitable fiscal measures to alleviate the stress on livelihoods are the need of the hour.
"The CII calls for measures to boost demand. Fiscal stimulus of Rs 3 lakh crore is required along with measures to support businesses. The Emergency Credit Line Guarantee Scheme (ECLGS) may be increased to Rs 5 lakh crore," he said.
Narendran said the Reserve Bank of India should expand its balance sheet in order to accommodate the increased stimulus so that lending costs remain contained.
However, economic recovery is dependent on an accelerated vaccination programme. The CII calls for minimum 71.2 lakh average daily vaccination doses between now and December to cover the entire adult population, he said.
Besides, domestic vaccine production must be ramped up to at least 175 crore doses by the year-end.
Narendran called for decentralising the healthcare infrastructure. He said the government should tap into private sector expertise to setup Covid care centres with stage one facilities in rural areas.
Special incentives should be given to industry for setting up medical care facilities in remote areas. They can include free land, deemed clearances and tax benefits.
( With inputs from ANI )
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