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RBI could have reduced key rates: India Inc

Last Updated: Tuesday, July 28, 2009 - 19:57

New Delhi: Describing the RBI`s credit
policy review as maintenance of status-quo, India Inc on Tuesday
said reduction in policy rates at this stage would have helped
in boosting economic growth.

"There are signs of revival in business confidence and
some reduction in policy rates at this stage would have helped
to provide fillip to corporate investment and thereby boosting
economic growth," Ficci President Harsh Pati Singhania said.

The RBI in its credit policy has kept unchanged all the
key policy rates and ratios like bank rate, repo and reverse
repo rates and cash reserve ratio.

PHD chamber President Satish Bagrodia also held similar
views, "RBI could have considered reducing the repo rate to
4.5 per cent and reverse repo rate to 3 per cent to facilitate
reduction in lending rates by banks."

While, Ficci said the projected growth rate for the
current fiscal should have been in the range of 6-6.5 percent. The RBI has forecast a growth rate of 6 per cent with upward bias.

CII Director General C Banerjee said that GDP growth is
likely to exceed the RBI`s expectation of six per cent in the
current fiscal. "In fact the economy could grow at around 7
per cent, as the fiscal and monetary measures have impact on
domestic demand," he said.

Commenting on the central bank`s policy Assocham
President Sajjan Jindal expressed hope that the RBI would
continue to follow accommodative monetary policy to ensure
sufficient credit flow to the industry.

Bureau Report

First Published: Tuesday, July 28, 2009 - 19:57

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