CII president and ICICI Bank chief executive KV Kamath has called for excise duty cuts to boost demand and tide over the current economic crisis. CII has also demanded that interest rates be reduced by a further 200-300 basis points to enable companies to access funds at easy rates as well as to promote consumer spend.

This is the first time in several years that the Indian industry has raised the demand for an across-the-board excise duty reduction, clearly signalling that it is bracing for tough times ahead. Cutting excise duties on products used by end consumers will help push the industrial wheel.

In his first term as finance minister, P Chidambaram accelerated growth by taking several initiatives on the direct tax front. The time has come to take a similar action on the indirect tax front as well, Mr Kamath told ET. Indirect tax collections fell last month and it remains to be seen how the government will respond to the excise duty cut suggestion in this backdrop

The CII president projected a GDP growth rate of 7-7.5% in FY08 but expects this figure to come down to 6-7%.
The industry is in the process of assessing the true impact of all the developments that have taken place in the past few months. I do not remember a situation where commodity prices have corrected so sharply or oil prices have fallen so steeply. The West is in a deep correction mode, and so are we, he said.

Mr Kamath said the overwhelming consensus at a recent meeting attended by CII members was that ongoing projects would not be shelved and would continue to be on stream.