RBI decision to hold policy rates at status quo disappointing: CII

In a statement issued on Monday, Director General, CII, Chandrajit Banerjee, said "The decision of the RBI to hold policy rates on status quo is disappointing."

"At a time when both growth and inflation dynamics call for an accommodative monetary policy, the RBI has taken a cautious approach of attending to the prospect of a possible resurgence in inflation over reviving growth in the economy," he added.

He further said that the quarterly GDP figures point towards a poor health of the economy even while industrial slowdown has not bottomed out and sluggish private and government capital expenditure is hurting investment in industry and economy.

In such a situation, the CII is looking at the RBI for interventions which would improve the cost and availability of credit to industry, Banerjee said.

"Besides, inflation is on a downward trajectory and core inflation, which reflects demand side pressures on the economy, has dipped to more than three year low. Admittedly, global growth is still fragile and the recent slide of the rupee has revived fears of inflation," he added.

"But, inflation in India is a supply side problem and expectation of a normal monsoon should keep inflationary expectations under check," he said.

CII hopes that the RBI would not wait for the next quarterly review but intervene sooner if the economic condition warrants a mid-course correction, Banerjee said.