India Inc unhappy with RBI decision

India Inc expressed disappointment over RBI’s decision to keep interest rates unchanged and hoped it would soon take policy action to boost investments and revive economic growth.

Assocham said the focus continues to be on rising inflation and not on the country’s economic growth. “The industry is disappointed that the key policy rate, the repo rate, has not been reduced.

The focus continues to be on managing inflation with the growth continuing to suffer,” Assocham President Rajkumar Dhoot said. The efforts to contain inflation by increasing interest rates in the last two years have not really helped the economy. Rather, high rates have impacted industry’s investment thus affecting the growth momentum.

Sharing similar views, CII hoped that the RBI would intervene sooner than later to cut repo rates which would help in boosting industrial production and reviving the economy.

Ficci said it feels while a cut in rate is imperative to revive investment growth, there would be some leeway now for banks to lend more via the cash reserve ratio (CRR) cut.

“This would help the liquidity position and also send a signal that the RBI is softening its stand on the monetary side”, CII Director General Chandrajit Banerjee said.

“The reduction in CRR by 25 basis points, while leaving the policy interest rate untouched, reflects that inflation remains a near-term concern for the RBI,” Ficci said. CII said it appreciates RBI’s position on inflation and understands it is higher than the comfort level.

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