Bolder interventions needed from RBI for eco growth: India Inc

India inc today sought from RBI "bolder intervention" in terms of reducing key policy rates, saying investments in the country are still not picking up due to high cost of funds.

"The decision of RBI to cut the policy rates by 25 basis points sends a strong signal that the RBI is refocusing its priority in favour of growth...However, the given economic conditions required a bolder intervention from the RBI," CII President S Gopalakrishnan said in a statement.

He said the economy is not yet out of the woods and there is a clear deficiency in demand as consumers are reluctant to undertake big purchases.

Investments on the other hand are fraught with problems, including the high cost of funds, he said.

"In such a scenario, aggressive monetary easing affected by a 50 bps cut in repo rate would have provided the necessary stimulus, along with a 50 bps reduction in CRR," he added.

Gopalakrishnan said falling global gold and oil prices and expectations of a normal monsoon should have prompted the RBI to revisit its monetary policy stance and lean more towards growth.

Sharing similar views, Ficci President Naina Lal Kidwai said going forward it will be important to continue with this stance at least over the next quarter.

"Kick starting investments would be the key to give an impetus to growth...The industrial growth is really slowing down and has not yet bottomed out. There has also not been much improvement in the credit disbursal to the industrial sector," she said.

The Ficci President hoped that todays rate cute will result in a commensurate decline in lending rates.

"The headline inflation numbers at this stage show clear signs of softening and a sharp dip has been reported in core inflation numbers as well. So at least on this front there is some respite," she added.

PHD Chamber President Suman Jyoti Khaitan too said that reduction in repo-rate by 25 bps may not be sufficient to revive economic growth.

"At this juncture, the economy needs bold steps to revive the lacklustre investment sentiments to kick start growth in the economy," he said.

"The RBI should go for easy monetary stance by lowering the key policy rates through significant rate cuts, making borrowing cheaper for the industry".

FIEO President M Rafeeque Ahmed advocated bringing export sector under priority sector lending to increase flow of credit to exporters.