India Inc pitches for cut in interest rates by RBI

Wholesale inflation fell to 2.60% in September as prices of food articles, led by vegetables, softened

India Inc today made a case for a cut in interest rates by the Reserve Bank (RBI) as there is a moderation in inflation.

Wholesale inflation fell to 2.60 per cent in September as prices of food articles, led by vegetables, softened.

Reacting to the numbers, Ficci (Federation of Indian Chambers of Commerce and Industry) President Pankaj Patel said overall, inflation remains within RBI's indicative trajectory and this is an encouraging sign.

"We feel that there is a need for greater balance in our monetary policy approach which is largely focused on managing inflation," he said in a statement.

It urged the central bank to take a more balanced view especially when the industrial sector needs support to improve on its growth performance.

"We need an accommodative monetary policy at this juncture and hope RBI brings down the policy rate sooner rather than later," Patel added.

Sharing similar views, CII (Confederation of Indian Industry) said in the recently announced monetary policy review, the opportunity was lost as far moderation of interest rate is concerned.

"Given the moderation in both CPI and WPI inflation, the RBI should resume the rate easing cycle in its next monetary policy announcement to give a fillip to demand," it said.

On October 4, the Reserve Bank kept benchmark interest rate unchanged on fears of rising inflation, while lowering growth forecast to 6.7 per cent for the current fiscal.