RBI criticises corporate view on growth

Hitting out at corporate India for their views that the RBI is not concerned about growth, RBI governor Raghuram Rajan said that a short sighted view in this regard would not be the right approach.

 “I think there is a misconception in corporate India that the central bank is not concerned about growth. I think its very short sighted when people comment that you are not helping growth this quarter. We are not talking about quarters, we are talking about years of sustainable growth. In order to get that you need to fight inflation beat it and then you can get the sustainable growth. So I think thats a message that has to seep through," said the apex bank chief. “The RBI is certainly not against growth. We want the strongest growth for this country that is possible and that means creating the framework that makes the sustainable growth possible,” Rajan added. Rajan also urged corporate India to bear with the central bank before strong growth kicks in.

"We want the strongest growth for this country, that is possible and that means creating the framework that makes the sustainable growth possible. we have been working on the framework, we are nearly there and I would say bear with us and hopefully if we can reach there and stay there we could produce many years of strong growth for corporate India," said Rajan. Rajan also came down heavily on decision by banks to not cut rates till now. “It is not my job to tell the banks what to do. All I am saying is that even though rates have come down, they have not passed it on. So the transmission process is still not working as significantly,” Rajan said.

“I do believe that there is a signalling effect and I do believe that once banks are confident that rates will come down and stay down, they may start passing it on,” he said.

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