PHD Chamber urges RBI to cut Repo Rate by 50bps to induce demand

PHD Chamber urges RBI to cut Repo Rate by 50bps to induce demand

PHD Chamber urges RBI to cut Repo Rate by 50bps to induce demand

 

No.PR-1
April 1, 2015
New Delhi
 

PHD Chamber urges RBI to cut Repo Rate by 50bps to induce demand
 

In order to rejuvenate the demand scenario and reduce the cost of doing business, President, PHD Chamber of Commerce and Industry Mr. Alok B. Shriram, has urged the RBI to reduce repo rate by at least 50 basis points from 7.5% to 7% in the forthcoming first bi-monthly monetary policy statement for fiscal year 2015-16 scheduled on April 7th, 2015.
 

appreciate and congratulate the Reserve Bank of India to undertake various calibrated steps to stabilize the price situation in the economy and setting the pace for gaining growth momentum, said Mr. Shriram, in a press statement issued here today.
 

At this juncture, cut in repo rate will not only reduce the costs of doing business but also enhance our exporters’ competitiveness in the international markets, he said.
 

Going ahead, we expect the repo rate to consolidate at around 6% by the end of December 2015.
 

We believe soft monetary policy stance will induce demand, re-capture industrial growth and boost overall economic growth, added Mr. Shriram
 

Revival of India’s growth is well recognized by various international organizations such as IMF, World Bank, United Nations, among others, however, the industrial sector is still not growing in a comfortable trajectory, as the sector is witnessing various impediments to growth, the most crucial being the high interest rates.
 

Though industrial growth (IIP) is estimated at 2.5% in April-January 2014-15, the growth of consumer durables is in the negative trajectory at (-)14% during the same period due to the sluggish demand scenario.
 

We believe higher growth of industrial sector vis-à-vis revival in the demand will push our economy towards higher growth trajectory, said Mr. Shriram.
 

India’s export sector has also shown a volatile growth trend, the exporters are not optimistic for revival of exports momentum in the coming times too. Our interactions with many exporters indicate a decline in order books for the coming months, he said.
 

Several external and internal factors have been observed responsible for slowdown in exports. A wide disparity in terms of interest rates in India and its competitors dilute the sentiments for exports and export competitiveness in international markets, said Mr. Shriram.
 

ENDS

Koteshwar Prasad Dobhal
Consultant (PR)