Millennium Post

RBI should go in for calculated risks, says Assocham

Suggesting that the RBI go in for 'calculated risks' to revive industrial output, Assocham has urged the central bank to cut interest rates that will boost investments and help revive the economy.

It is time the Reserve Bank gets rid of its obsession with the inflation numbers, while completely ignoring grave situation thrown in by constantly decelerating industrial growth, Assocham president Rajkumar Dhoot said. 'We would urge the RBI to stop taking baby steps, if at all, and go in for calculated risks to revive the industrial output,' he said.

RBI is scheduled to announce its mid-quarterly review of the monetary policy on Monday amid high inflation and a high interest rate regime that is hurting industrial expansion.

Assocham said it is no more a question of trade-off between growth and inflation. 'It has become an issue of sustaining jobs.'

In August, the overall inflation rose to 7.55 per cent, driven by higher prices of food items and manufactured goods. In the Budget 2012-13, the government had pegged GDP growth at 7.6 per cent [plus, minus 0.25 per cent] for the current fiscal. The economic growth rate had plunged to 9-year low of 6.5 per cent in 2011-12. The industry chamber said declining industrial output has been a major concern. The country's industrial production grew merely by 0.1 per cent in July this year.

Further, Assocham said, the exports have been declining due to sluggish demand in the Western markets.
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