Press Esc to close
Saturday 20 September 2014
News updated at 1:05 AM IST
Weather
Max: 27.8°C
Min : 20.1°C
In Bangalore
Sunny day

Disappointed India Inc seeks interest rate cut by RBI

April 12, 2013 PTI

Expressing disappointment over poor industrial performance, India Inc on Friday pressed for rate cut by the RBI to boost production and further revive the economic growth.

Industry chamber FICCI said the RBI should intervene and cut interest rates.

“The IIP data for February calls for serious attention. It is important that RBI focuses on bringing down interest rates to stimulate investments which will further boost the demand,” FICCI Secretary General Didar Singh said.

Besides, he said, there is a need to ensure speedy approvals for large projects, under the Cabinet Committee on Investments.

Sharing similar views, CII Director General Chandrajit Banerjee said, the industry body hopes the RBI will relook at its monetary policy in the light of latest IIP figures and reduce interest rates.

“We hope that the RBI would reduce repo rate and Cash Reserve Ratio (CRR) by 50 basis points, each, while announcing the annual monetary policy on May 3,” he said.

CRR is the portion of money banks are required to keep with the RBI.

Showing slump in the economy, the industrial growth has slipped to 0.6 per cent in February this year mainly on account of contraction in power generation and mining output and poor performance of manufacturing sector.

Factory output, as measured by the Index of Industrial Production (IIP), had grown by 4.3 per cent in February last year.

Assocham said both the macro economic numbers— industrial production and retail inflation— clearly point to a dismal state of affairs in the Indian economy, requiring urgent and bold steps not only from the Finance Ministry but also from the Reserve bank.

“Industrial growth of mere 0.6 per cent in February and a cumulative of 0.9 per cent is hardly a growth. We are almost slipping into the negative zone. Today’s numbers including continuous double digit consumer inflation will add to the problems at the macro level,” Assocham President Rajkumar N Dhoot said.

He said an all-out effort must be made to restore investor sentiment and consumer confidence.

“Both stand shaken today. While it is true that the global factors have aggravated the situation, there is not much enthusiasm in the domestic economy as well,” he added.

PHDCCI President Suman Jyoti Khaitan pitched for 100 basis points (1 per cent) cut in short-term interest rate by the RBI in its forthcoming credit policy, saying such a step was necessary to improve investor sentiments and promote growth.

“Tight monetary stance by RBI has impacted investment sentiments in the economy and inflation still remains in an uncomfortable growth trajectory,” he said.

Keywords: IIP, industrial growth, Indian economy, India Inc, FICCI, interest rate cut, repo rate, CRR, RBI


Go to Top

Photo Gallery
Bollywood actor Farhan Akhtar at the launch of Coca Cola Zero in New Delhi ...

Bollywood actor Farhan Akhtar at the launch of Coca Cola Zero in New Delhi ...

Sadananda Gowda releasing the logo for a special cleanliness campaign of SCR at Rail Nlayam ...

Sadananda Gowda releasing the logo for a special cleanliness campaign of SCR at Rail Nlayam ...

Manmohan Singh greets Chinese President Xi Jinping as Sonia Gandhi looks on ...

Manmohan Singh greets Chinese President Xi Jinping as Sonia Gandhi looks on ...

Indian flagbearer Sardar Singh carries the national flag to lead the contingent into Incheon ...

Indian flagbearer Sardar Singh carries the national flag to lead the contingent into Incheon ...

Asian Games torch arrive at main stadium for opening ceremony of the 17th Asian Games ...

Asian Games torch arrive at main stadium for opening ceremony of the 17th Asian Games ...

Artists perform during the opening ceremony for the 17th Asian Games in Incheon, South Korea ...

Artists perform during the opening ceremony for the 17th Asian Games in Incheon, South Korea ...

Omar Abdullah inaugurates a reconstructed bridge which was washed away by floods at Gundoora ...

Omar Abdullah inaugurates a reconstructed bridge which was washed away by floods at Gundoora ...

Students take part in a rally aganist the alleged molestation of Jadavpur University female ...

Students take part in a rally aganist the alleged molestation of Jadavpur University female ...

Kashmiri Sikh people preparing food for the flood victims at a relief camp ...

Kashmiri Sikh people preparing food for the flood victims at a relief camp ...

A ballot box is emptied as workers prepare to count ballots at a counting centre in Aberdeen...

A ballot box is emptied as workers prepare to count ballots at a counting centre in Aberdeen...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523