Harsh & disappointing: India Inc
19 Dec 2012 5:39 AM IST
Terming RBI's policy 'harsh and disappointing', India Inc on Tuesday asked the central bank to cut interest rates before the January 29 policy review to boost economic growth. Industry body CII said that with the government having announced a clear road map for fiscal consolidation and non-food inflation demonstrating a secular decline, conditions are conducive for RBI to have intervened with a repo and CRR reduction.
'We hope that the RBI would not wait for the next quarterly review but would recognise the enormity of the problem and intervene sooner than that,' said CII Director General Chandrajit Banerjee. He added that industry is looking at the central bank for some relief with interventions which would help availability of capital at lower rates. Describing the RBI decision as 'harsh and disappointing', Assocham President Rajkumar Dhoot said, 'Our hopes of seeking some relief are dashed as the apex bank has yet again given away the opportunity to help reverse business sentiments and see investments taking place.'
Ficci said that inflation numbers should provide the central bank comfort to begin to consider a rate cut early in the next year. 'With the inflation numbers showing a decline and the global economy still in a difficult situation, industry is crying out for an impetus for investment and growth. Lower interest rates would be oxygen to the sentiment which is beginning to turn positive,' said Ficci President Naina Lal Kidwai.
The WPI inflation in November moderated to 7.24 per cent but retail inflation remain elevated at 9.90 per cent. The Indian economy grew by 5.4 per cent in the first half (April-September) of the current fiscal, against 7.3 per cent in the corresponding period last year.
Asserting that RBI has its own constraint, Commerce and Industry Minister Anand Sharma said, 'There is, of course, a positive side that India has an independent regulator RBI which is not listening both to myself and the finance minister but we expect them to.'
'We hope that the RBI would not wait for the next quarterly review but would recognise the enormity of the problem and intervene sooner than that,' said CII Director General Chandrajit Banerjee. He added that industry is looking at the central bank for some relief with interventions which would help availability of capital at lower rates. Describing the RBI decision as 'harsh and disappointing', Assocham President Rajkumar Dhoot said, 'Our hopes of seeking some relief are dashed as the apex bank has yet again given away the opportunity to help reverse business sentiments and see investments taking place.'
Ficci said that inflation numbers should provide the central bank comfort to begin to consider a rate cut early in the next year. 'With the inflation numbers showing a decline and the global economy still in a difficult situation, industry is crying out for an impetus for investment and growth. Lower interest rates would be oxygen to the sentiment which is beginning to turn positive,' said Ficci President Naina Lal Kidwai.
The WPI inflation in November moderated to 7.24 per cent but retail inflation remain elevated at 9.90 per cent. The Indian economy grew by 5.4 per cent in the first half (April-September) of the current fiscal, against 7.3 per cent in the corresponding period last year.
Asserting that RBI has its own constraint, Commerce and Industry Minister Anand Sharma said, 'There is, of course, a positive side that India has an independent regulator RBI which is not listening both to myself and the finance minister but we expect them to.'
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