The captains of Indian industry have welcomed the RBI’s move to cut rates saying the move was on their expected lines.
“I did not expect 50 basis points cut in the repo rate. I believe there are still many hidden inflationary pressure points within the economy. The banks are unlikely to pass on the benefit of these rate cuts to the end consumer in a hurry. I welcome the RBI Governor's statement that petroleum products must be priced to cover at least the cost of production — what he is really saying is let us pursue responsible fiscal policy to ensure effective monetary policy," Shekar Viswanathan, deputy managing director, Toyota Kirloskar Motor Private Limited, said.
J C Sharma, MD, Sobha Developers Ltd said the RBI move has given way to two key benefits. Firstly, the EMI’s (equated monthly instalments) will be reduced for existing borrowers, who were feeling the pinch of the increasing interest rates. They can plan their budget better. Secondly, new consumers, who were sitting on the fence, will now be able to borrow at a low interest rate. “We are confident that for the next couple of years at least, the EMI’s will not go up even though the income levels of the people will keep increasing. So, one can take a call on buying a home from now onwards. And as a result, it will help boost the industry and the economy as well,” he said.
As far as the real estate sector is concerned, we believe any rate cut will benefit the industry immensely. “We have been suffering from increase in rates for the past three years and it has affected us by the way of high interest payouts and diminishing liquidity. We feel that the worst is behind us now. We have all been expecting this kind of rate cut for quite some time,” Sharma said.