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New Delhi: Industry body CII today said it expects a recovery in India's economy in the second half of this financial year.

The chamber said that lowering interest rates by 100 basis points could inject a huge growth impulse.

In a statement, the Confederation of Indian Industry pointed out that in many sectors, including automobiles, production and sales have rebounded after a temporary slowdown following introduction of the GST (Goods and Services Tax).

"CII is confident that positive developments in the global economy and upcoming festival season as well as government capital expenditure will contribute to growth.

"Capacity utilisation has been building up and businesses have begun to firm up their investment intentions for a period of time," it said.

It also observed that care must be taken that public capital expenditure, including by state governments, remains elevated.

Reforms in the area of ease of doing business will contribute to investments, including FDI, the chamber said, adding that these factors would help build growth forces.

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