Easy Interest Rates Imperative, Say Corporate Captains

Reducing the cash reserve ratio levels would definitely ensure that we add more money to the system, resulting once again in an addition to the inflation. As a professional there would be preference for this mode of action but I admit that we live in a country where almost 90 per cent of the population cannot hedge against inflation.

Reducing the cash reserve ratio would ensure more money to the corporates but since treasury borrowings cannot be restricted the whole affair would be cosmetic in nature.

A growth policy coupled with a tolerable form of inflation should be aimed for in the monetary policy.

 

I would very much expect the interest rates to drop with the monetary policy. That is paramount to the development of the nation and a healthy economy and that has been recognised almost by all quarters. The genesis of the present liquidity crisis could be attributed to, amongst others, the rising cost of inputs.

I am forced to admit that there is more to the crisis affecting Indian industry than just bringing down the CRR or lowering the rates of interest what that amounts to is a matter which requires more detailed study.