India Inc badly ‘disappointed’ by RBI Guv’s pro-people act
31 Oct 2013 5:07 AM IST
'This has disappointed the industry especially as the investment climate continues to be weak and growth outlook remains muted as a high interest rate regime deters consumption and investment demand,' CII director general Chandrajit Banerjee said.
The Reserve Bank hiked the short-term lending (repo) rate by 0.25 per cent as part of efforts to tame inflation - a step that will make corporate and consumer loans more expensive.
Ficci secretary general A Didar Singh said: 'Given the slowdown in economic growth, weakening pace of investment activity and downswing in consumption, we were hoping that the RBI would steer focus towards supporting growth that is so essential for employment generation in the economy.'
'The kind of inflation we are witnessing in India is more of a supply-side phenomenon. While raising interest rates would have little impact on such inflation, it will certainly penalise Indian industry that is already in the midst of a slowdown,' Singh said.
High food prices, especially of onions and some other vegetables, pushed up Wholesale Price Index (WPI) inflation to a seven-month high of 6.46 per cent in September. The industry is apprehensive that the rate may be raised again if inflationary pressure continues.
Assocham President Rana Kapoor said the hint is rather clear from Rajan’s statement which reads: ‘On inflation, both wholesale and consumer price inflation is likely to remain elevated in the months ahead, warranting an appropriate policy response.’
The Reserve Bank hiked the short-term lending (repo) rate by 0.25 per cent as part of efforts to tame inflation - a step that will make corporate and consumer loans more expensive.
Ficci secretary general A Didar Singh said: 'Given the slowdown in economic growth, weakening pace of investment activity and downswing in consumption, we were hoping that the RBI would steer focus towards supporting growth that is so essential for employment generation in the economy.'
'The kind of inflation we are witnessing in India is more of a supply-side phenomenon. While raising interest rates would have little impact on such inflation, it will certainly penalise Indian industry that is already in the midst of a slowdown,' Singh said.
High food prices, especially of onions and some other vegetables, pushed up Wholesale Price Index (WPI) inflation to a seven-month high of 6.46 per cent in September. The industry is apprehensive that the rate may be raised again if inflationary pressure continues.
Assocham President Rana Kapoor said the hint is rather clear from Rajan’s statement which reads: ‘On inflation, both wholesale and consumer price inflation is likely to remain elevated in the months ahead, warranting an appropriate policy response.’
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