Millennium Post

Industry captains sulk, seek rate cut before next review

Expressing disappointment over RBI’s decision to keep key rates unchanged, India Inc on Monday said that the time was appropriate for cut in interest rates to revive the country’s economic growth.

The industry said it hoped RBI would not wait for the next quarterly review on 30 July to intervene and would do so earlier, if required.
The industry urged the central bank to consider a rate even before the next monetary policy review on 30 July.
The repo rate at which the RBI lends to the system has been retained at 7.25 per cent, while the cash reserve ratio will continue to be 4 per cent.

CII Director General Chandrajit Banerjee said ‘The decision of the RBI to hold policy rates on status quo is disappointing. At a time when both growth and inflation dynamics call for an accommodative monetary policy, RBI has taken a cautious approach of attending to the prospect of a possible resurgence in inflation over reviving growth in the economy.’

The quarterly GDP figures point towards a poor health of the economy even while industrial slowdown has not bottomed out and sluggish private and government capital expenditure is hurting investment in industry and economy, CII said.

‘CII hopes that the RBI would not wait for the next quarterly review but intervene sooner if the economic condition warrants a mid-course correction,’ the statement said.

Assocham also said the RBI’s decision to keep rates unchanged is a complete disappointment.

‘We cannot be going just by a sole consideration of rupee depreciation and its possible impact on inflation. Why ignore other factors like arrival of good Monsoon which will surely boost food supply to have a dampening impact on the price situation,’ Assocham President
Rajkumar N Dhoot said.
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