New Delhi: The Centre and the state governments should come together and reduce some taxes to reduce the burden of inflation on the common man, Sanjiv Bajaj, President, Confederation of Indian Industry (CII), said on Tuesday. In an interview with ANI, Bajaj, who is also the Chairman of Bajaj Finserv, said the spike in inflation would lead to a slowdown in economic growth.
He said the government and the Reserve Bank of India (RBI) should come forward and take some measures to control the price rise.
Bajaj pointed out that the RBI has started increasing the interest rate, which will help to moderate inflation. “We should expect additional rate hikes from RBI as we are much more than we were at the pre-pandemic level. Food inflation will also moderate as the forecast that we are seeing is of normal monsoon,” he said.
Talking about the tepid stock market listing of Life Insurance Corporation of India (LIC), Bajaj said, “the equity markets are for long-term investment. LIC listed on discounted rate but if one does not sell the shares, he will not lose money.”
On the weakness in the rupee, which fell to a low of 77.56 against the US dollar last week, he said the rupee should reach to its natural level. “If the change is gradual, it allows the industry to absorb that or price that competitively,” he said.
Talking about the economy’s current state, CII President said several positive tailwinds and growth in the capital investment cycle for the last two quarters. Still, there are also some headwinds like inflation and the external uncertainties due to the Russia-Ukraine war.
Bajaj said, commenting on the recent Adani-Holcim deal, “this shows that we are part of a vibrant economy. “We are the 3rd largest start-up nation in the world. You can see the number of Unicorns India has created,” he added.