JOIN USEchoing the demands of corporate India, CII on Thursday urged the Reserve Bank to cut credit reserve ratio (CRR) by 100 basis points (bps) to facilitate more investments in the country.
Speaking at a CII event here, the trade body's president Kris Gopalakrishnan said, “The RBI and the government need to work in tandem and we look forward to 100 bps cut in CRR.” He added that the higher interest rates among banks have been destructive for the economy as it has slowed down investments.
CII in its 10-point agenda for economic revival has sought the increase of capital and reduction in cost of capital through 75 bps repo rate cut and 100 bps CRR cut.
In its March monetary policy review the RBI had cut by 75 basis points from 5.5 per cent to 4.75 per cent, however, in May the RBI had refrained from any further CRR cut citing upside risks in inflation but had lowered repo rate by 25 bps.
Apart from that, it has also asked the government to promote investments in infrastructure and manufacturing sector by fast-tracking 50 mega projects of more than Rs 1,000 crore and 200 large projects between Rs 250-1,000 in the next 6 months.
“The implementation of GST is also very crucial and CII will closely work with the central and state governments for early introduction of GST,” Gopalakrishnan said.
For the infrastructure sector, he asked the government to set up an independent Public-Private-Partnership (PPP) commission with authority and jurisdiction to renegotiate terms if contract.
“The government should enable access for financing of projects and resolve land acquisition and environmental issues,” he explained.
Gopalakrishnan added that the government's move to double gas prices from April next year will have a 'cascading effect' on power tariffs.
With regards to the SME and MSME sector, CII wants the government to revise the definition and classification criteria for MSMEs and to enable policies to access equity capital.