RBI monetary policy blocking fresh investments: Ficci

"The RBI policy of monetary tightening is inhibiting fresh investments and hurting growth. The government and RBI need to take steps to bring down the interest rates," he said.

The Indian economy has potential to grow at double-digit, "so why settle for an annual growth of 6-6.5 per cent. Inflation is related more to supply side bottlenecks", Kanoria said on the sidelines of a seminar here.

RBI has opted for high interest rate regime to rein in inflation which had been ruling much above its comfort level of 5-6 per cent. While wholesale prices based inflation was 6.87 per cent in July, at the retail level it was ruling close to double digit - 9.86 per cent.

He also called upon all state governments to rally round the Centre for earliest possible implementation of the Goods and Services Tax (GST).

Besides, Kanoria said, the government should curtail spending and reduce the fiscal deficit, and prescribed targeted subsidies.

"There is a need to revisit the subsidies. Subsidies should be targeted and reduced so that only those deserving them are able to avail of the benefits. The subsidy in diesel is going to people who can very well afford to pay for it," he said.

He also called for a rational law on land acquisition which will take care of the people's food security while allowing industry and services to acquire lands.

On the depreciation of the rupee, Kanoria said RBI should concentrate on stabilising the rupee and arresting the volatility of the national currency.

He also said the country should have close economic relations with the ASEAN nations.

Calling for better ties with Myanmar, he said close relations with the ASEAN member country would give a boost to the economies of the north eastern states.