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RBI policy is anti-growth, must cut rates to balance inflation: Ficci chief

'Inflation is necessary irrespective of growth. There has been no growth without inflation,' Patel said

Press Trust of India  |  Washington 

Pankaj R. Patel, Zydus, FICCI
Pankaj R Patel

President Pankaj Patel on Saturday slammed the Reserve of over its reluctance to cut interest rate, saying its policies were "not industry- friendly" and posed a hurdle in the country's economic growth.

In its latest monetary policy review on October 4, the RBI had kept the policy rate unchanged at 6 per cent even as it cut the growth forecast to 6.7 per cent for the current financial year.

Patel said such a move was "anti-growth".

"RBI is not behaving properly. It (RBI policy) is anti-growth," Patel told a group of Indian reporters here.

Indian industry, Patel said, wishes that there be a drop in interest rates, on which, he said, the RBI has adopted a rigid approach.

"We want a drop in This (interest rate) is a huge problem now for us. The real in today is touching six per cent," he said, arguing that there should be a balance between growth, inflation, and

"is necessary irrespective of growth. There has been no growth without inflation," a visibly upset Patel said, adding that his views were known to the RBI and the government.

Patel is leading a delegation of Indian industrialists to attend events on the sidelines of the annual meeting of the International Monetary Fund and the World

"A tighter monetary policy is hurting India's economic growth," Rashesh C Shah, senior vice-president of Federation of Indian Chambers of Commerce and Industry (Ficci) said, as he chipped in to express the prevailing sentiment against the RBI among the countrys corporate sector.

"On the other hand, the government has adopted a business-friendly policy," said Shah.

Ficci Secretary General Sanjaya Baru said it is a myth that there is no new jobs creation.

"Because we do not have to produce annual employment data, so everyone is talking in thin air. The bulk of the workforce has been created in sectors that have created this six percent growth," Baru said, adding that a lot of these jobs are in informal sectors.

"To accelerate growth, moving forward, it is clear that the government doesn't have the capacity. The private sector has to do it. Therefore, you need to ensure that there is conducive policy environment," he said.

"Message for the government is -- let's go forward," he added.

Another member of the delegation, former president of Ficci, Rajan Bharati Mittal, said technology is destined to play an important part in India's growth.

"Once they get into mass production, countries like should be worried about the impact of automation on jobs and employment," said Mittal.

First Published: Sat, October 14 2017. 11:42 IST