Confederation of Indian Industry (CII) president Rajesh Shah has emphasised on the immediate need for fiscal consolidation, and urged the Centre to adhere to the principles of fiscal management.The CII president stated: ``There was an imminent need to eliminate unproductive expenditure, restrict public borrowings, curb on the use of borrowings for consumption expenditure and for proper targeting of subsidies. The revenue expenditure should be reduced by at least 10-15 per cent every year.''

Associated Chambers of Commerce & Industry of India (Assocham) president L Lakshman said: ``The survey has underlined the need for bold economic- policy initiatives to attract domestic and foreign investors to stimulate demand to revive industrial activity. This could be done by stepping up investment particularly in the infrastructure sector, rationalising the import-duty structure, pruning non-plan and administrative expenditure, phasing out non-merit subsidies and effecting large scale-privatisation of PSUs to mobilise resources.''

The PHD Chamber of Commerce & Industry president OP Vaish stated: ``The survey highlights some of the major policy initiatives of the government such as liberalising foreigninvestment and setting up of the regulatory authorities in some sectors. These measures have obviously not been enough to prop up the economy.''

Eicher group chairman Subodh Bhargava said: ``The survey is a cause for alarm for the economy. The economy needs demand-generation, both consumer and for projects. The government has to take hard decisions such as reducing subsidies or those which protect vested interests such as insurance and PSU disinvestment. What we need is investment in infrastructure, more transparency and better implementation of economic policy, which will revive the industry.''

Escorts group chairman Rajan Nanda said: ``The liberalisation of India is the right thing, but we're doing it the wrong way. Deregulation has not been addressed in a wholistic manner. The investment in infrastructure will not take place till there is clarity in policy. The budget should be expressive of long-term policy and should not be a narrow policy. The policy should be delinked from governance and should beprotected by all politicians.''

Maruti Udyog MD RSSLN Bhaskarudu said: ``The government should take measures towards infrastructure development to revive demand.''

The chambers felt that deceleration in growth of the GDP to 5 per cent in 1997-98 from a relatively strong position of 7.5 per cent in the previous year was mainly owing to a sharp decline in the industrial growth and negative growth of agricultural production. They added that the emphasis on accelerating the economic growth to 7-8 per cent per annum would require an increase in the gross domestic savings rate to 30 per cent of the GDP from the present level of 26.1 per cent. They further stated that the government will have to increase its savings level in order to bridge this gap.

The chambers blamed the widening of the fiscal deficit to 6.1 per cent asagainst the targeted 4.5 per cent to the higher wage bill necessitated by the Fifth pay Commission Report and shortfall in net tax revenue collection and divestment receipts.

The CIIpresident felt that any increase in personal or corporate tax would be a severe retrograde step at this stage. The government should instead pursue PSU disinvestment more vigorously beyond 51 per cent, he added. CII also felt that the macro economic fundamentals which had reached healthy levels in the last few years are under tremendous pressure.