Pare interest rates, Ficci tells PM

Though state-run banks have reduced interest rates, private sector banks were still to follow suit,  Federation of Indian Chambers of Commerce and Industry (Ficci) President Harsh Pati Singhania said.

He said government borrowing programme this fiscal and drought-like conditions could lead to inflation driven by agri- commodity shortages.

“We must ensure that interest rates do not rise or else the recovery process will be adversely impacted,” he said.

The central bank cut its lending rate by 4.25 percentage points between October and April to 4.75 per cent and the government slashed duties and increased public spending to stimulate the economy hit by the global slump.

FDI in retail
The economy, which expanded by 6.7 per cent in 2008/09 (April/March), is likely to grow by around 6 per cent in 2009/10.

The industry lobby also asked the government to allow foreign investment up to 49 percent in multi-brand retail sector and auction third-generation wireless spectrum at the earliest in a transparent manner.

On exports, Ficci wanted more tax incentives “at par with those offered in other developing countries” apart from support to divesify their exports.