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Tribune News Service/PTI
New Delhi, December 5
Expressing disappointment at the RBI’s decision to keep interest rates unchanged, industry body Ficci today said there is a need for continued action on the policy rate front to boost growth.
Meanwhile, Assocham said accommodative stance on policy is understandable as long as banks are nudged to pass on the rate cut benefits to customers.
RBI has given an adequate approach to the accommodative stance of monetary policy in the era where lot of developmental activities are on the move and thrust of the government is to create demand in the economy, PHD Chamber said.
“The RBI has left the repo rate unchanged in today’s announcement. This is contrary to what Ficci was expecting given the weakening growth scenario in the economy. We note with concern that the transmission of the earlier policy rate cuts has not happened adequately, and are disappointed with the decision to not cut the repo rate as there is need for continued action on the policy rate front,” Ficci president Sandip Somany said.
He said a reversal in the declining economic growth trajectory is clearly the need of the hour and all steps should be taken to bring about this change.
“A cut in the policy rate was also important for boosting the sentiment in the market and among investors, and Ficci was hoping for a bolder action on this front. In fact, we feel that a further cut of 75 to 100 basis points in the repo rate is required in a short period of time to strengthen growth in the economy,” he added.
Assocham president BK Goenka said, “A temporary pause by the RBI to the policy interest rate reduction cycle while keeping its stance accommodative is understandable as long as it keeps nudging the banks to significantly pass the benefits of earlier rate combined repo rate cuts of 135 basis points since February this year.” While inflation control remains the mandate of the RBI, balancing the target with growth is equally important, Goenka said, adding the focus should majorly be directed towards demand revival.
“At this juncture, the full transmission of the earlier policy rate cuts by the banking sector in terms of reduced lending rates would be crucial to boost liquidity, induce demand and industrial growth in the country.
“Going ahead, we look forward to the continued softer stance of monetary policy to help revive demand, enhance sentiment for investments and expanding production capacities,” said DK Aggarwal, president, PHD Chamber of Commerce and Industry.
A temporary pause by the RBI to the policy interest rate reduction cycle while keeping its stance accommodative is understandable as long as it keeps nudging the banks to significantly pass the benefits of earlier rate combined repo rate cuts of 135 basis points since February this year — BK Goenka, President, ASSOCHAM
We note with concern that the transmission of the earlier policy rate cuts has not happened adequately, and are disappointed with the decision to not cut the repo rate as there is need for continued action on the policy rate front —Sandip Somany, President, FICCI
Going ahead, we look forward to the continued softer stance of monetary policy to help revive demand, enhance sentiment for investments and expanding production capacities — DK Aggarwal, President, PHD chamber of Commerce and Industry
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