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| India Inc dissapointed over RBI's policy review |
| BS Reporter / New Delhi Jan 27, 2009, 14:54 IST |
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India Inc has expressed disappointment over Reserve Bank of India’s (RBI) decision to not change repo and reverse repo rate in its review of credit policy.
Federation of Indian Chambers of Commerce and Industry (Ficci) said that the RBI had failed to avail of the opportunity to provide stimulus to the Indian economy by infusing extra money in the system through interest rate cuts.
“Inflation was expected to moderate to 3 per cent by March this year. This was clearly a window of opportunity, as it would have served to further stimulate the confidence building measures initiated by the government and the RBI in the recent past,” Ficci said.
While Ficci welcomed the extension of the liquidity support to mutual funds and housing finance companies from March 30 to September 30, 2009, the chamber said, the support should have been extended to March 2010 to enable the lending agencies plan their activities with greater market certainty.
Confederation of Indian Industry (CII) said, many sectors, including manufacturing sector were seeing a decline and there were no sign of reversal in the slowdown. “The small scale sector is the most affected and it is indeed worrying that credit to small enterprises has fallen off sharply,” said CII.
The Associated Chambers of Commerce and Industry of India (Assocham) said the need of the hour was that Indian companies got money at relaxed interest rates
“The demand creation and liquidity availability is still an issue but will remain so until interest rates are further moderated,” said Sajjan Jindal, president Assocham.
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