RBI disappoints on status quo; 50 bps repo rate cut was expected: PHD Chamber

RBI disappoints on status quo; 50 bps repo rate cut was expected: PHD Chamber

RBI disappoints on status quo; 50 bps repo rate cut was expected: PHD Chamber

 

No.PR-3
April 7, 2015
New Delhi
 

RBI disappoints on status quo; 50 bps repo rate cut was expected: PHD Chamber

Mr. Alok B. Shriram, President, PHD Chamber of Commerce and Industry
expressed disappointment on status quo maintained by RBI, as the Chamber was expecting a 50 basis points cut in the repo rate in today’s First Bi-monthly Monetary Policy Statement for 2015-16.
 

Repo rate under the liquidity adjustment facility (LAF) has been kept unchanged at 7.5%, cash reserve ratio (CRR) of scheduled banks kept unchanged at 4%, reverse repo rate under the LAF unchanged at 6.5% and statutory liquidity ratio (SLR) of scheduled commercial banks unchanged at 21.5%.
 

Industry is facing a tough environment as the demand is decelerating and costs of doing businesses are rising, said Mr. Alok B. Shriram in a press statement issued here today.
 

The repo rate cut by 50 basis points during the January-March 2015 is also not factored at ground level as there is no respite to the high EMIs of the consumption segments, he added.
 

There must be transmission by the banks of the front loaded repo rate cut by RBI to the lending rates, said Mr. Shriram.
 

Moreover, industry growth at 2.5% is not in sink with government’s ambitious Make in India programme, he said
 

Make in India programme must be complimented by all round facilitating business environment from rural roads to railways, airports and ports. High transportation and transactional costs are impacting the price cost margins of businesses at domestic level and competitiveness in the international markets.
 

The industry must be facilitated to grow in double digits to achieve the desired objectives of Make in India, he added.
 

We request RBI  to consider containing inflation at one hand and maintaining growth on the other, he said.
 

Going ahead, we expect a calibrated policy stance from the RBI for the growth facilitating measures with a 50 basis points cut in repo rate in the near term and an overall 150 basis points cut by December 2015, said Mr. Shriram.
 

ENDS

Koteshwar Prasad Dobhal
Consultant (PR)