New Delhi, Jan 22 (IANS) Finance Minister Pranab Mukherjee should give priority to measures that would boost growth and help curb fiscal deficit in the union budget for 2012-13, says industry lobby Confederation of Indian Industry (CII).

"Slowing economic growth accompanied with high fiscal deficit poses a unique challenge, which has reduced the room for fiscal or monetary manoeuvrability of the government," said Chandrajit Banerjee, CII director general.

"The union budget, 2012-13, is therefore a very important opportunity for the government to provide the necessary fillip to growth, which has been lacklustre for the last one year," Banerjee said in pre-budget memorandum.

India's gross domestic product (GDP) growth is expected to fall below 7.5 percent in 2011-12 as against the budgetary target of around nine percent, the finance minister said last week.

In the memorandum, CII emphasised the need for turning around the growth trend in investment that had declined considerably in the last few quarters.

CII said boosting investment in the present scenario, marred by uncertain economic outlook, called for an aggressive policy stance, like increasing depreciation rate on plant and machinery, introducing investment allowance, fast-tracking implementation of 100 mega projects, providing boost to investment in infrastructure, simplifying tax and regulatory compliance.

Keeping in mind the the fiscal situation, CII said it had desisted from asking for a direct fiscal stimulus which would entail reduction of excise duties. It had, however, advocated against any increase in excise duty and services tax and reduction in customs duty until the situation returns to normal.

The industry association suggested that fiscal consolidation was possible through tapping of larger revenue options and rationalisation in expenditure by way of improvement in productivity and reduction in subsidy bills.