Corporate India was jubilant over RBI's decision on Wednesday in not hiking interest rates for now in an effort to strike the right balance between inflation and growth.
India Inc opined that monetary policy alone was not the answer to tackling inflation as the government must also initiate supply-side reforms and put in place better storage facilities to contain food prices.
To begin with, Ficci President Naina Lal Kidwai said, "We are happy that RBI has taken cognisance of the weak state of the industrial economy and hope that the next move will be in the direction of lowering of policy rates. At this juncture we certainly need to push all buttons to safeguard growth and revive investor sentiment."
"The government needs to address food prices on a war footing reviewing procurement, warehousing and logistics strategies. We need to remove impediments to movement of food, to ensure government stockpiling is not contributing to food inflation, and to act strongly against hoarding," she added.
CII Director General Chandrajit Banerjee said, "The RBI has demonstrated restraint and foresight to strike the right balance between inflation and growth."
The status quo decision came as a breather as only last week the RBI had pulled up banks for not helping it in monetary policy transmission.
Assocham President and YES Bank Managing Director and CEO Rana Kapoor said, "There is a strong case for banks to cut lending rates in the wake of ample liquidity in the system. They are sitting on a big cash which should be finding ways into productive investments."
Indian Overseas Bank CMD M Narendra said, "Since the core inflation has been under control, RBI has taken a decision to keep rates unchanged. The international factors have also been factored in by the central bank. It is a very encouraging move and they have taken a decision to not disturb the positive aspects of the economy.
Though food and vegetable price inflation is a concern, it is expected to come down in the following months. January to March period would be a period of better growth, provided inflation is kept under control."
The short-term lending rate was kept unchanged at 7.75 percent, while the cash reserve ratio (CRR) remained at 4 percent, RBI said in its Mid-Quarter Monetary Policy Review.
"Calibrated policy stance by the RBI is inspiring in the wake of volatile global economic environment and vulnerabilities on the domestic front," PHD Chamber of Commerce President Suman Jyoti Khaitan said.