Aggressive repo rate cut needed to revive demand and industrial activity: PHD Chamber

Aggressive repo rate cut needed to revive demand and industrial activity: PHD Chamber

Aggressive repo rate cut needed to revive demand and industrial activity: PHD Chamber

 

No.PR-36
June 2, 2015
New Delhi

 

Aggressive repo rate cut needed to revive demand and industrial activity: PHD Chamber
 

While welcoming 25 basis points repo rate cut by the Reserve Bank of India,   Mr. Alok B. Shriram, President, PHD Chamber of Commerce and Industry expressed that there must be an aggressive move to cut repo rates as demand scenario and industrial growth are in severe slowdown.
 

Repo rate must not be more than 6% to induce demand and refuel industry growth at this juncture, added Mr. Shriram.
 

Keeping in view of WPI inflation in negative trajectory (around -3% in April 2015) and CPI inflation in the comfortable zone (around 5% in April 2015), it becomes inevitable that interest rate environment is in sync with declining inflation, said Mr. Shriram.
 

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

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

The policy repo rate under the liquidity adjustment facility (LAF) has been reduced to 7.25% from 7.5%.
 

We appreciate and congratulate the Government and RBI on various calibrated steps to stabilize the price situation in the economy, which is expected to improve the livelihood of common man, said Mr. Shriram.
 

However, inducing demand scenario would be critical to strengthen growth trajectory and create jobs for millions of young work force.
 

While containing the inflation, demand in the economy should remain intact, said Mr. Shriram.
 

Continuation of rate cut in the coming would be critical to help demand to remain intact and sentiment for investments to strengthen and grow, said Mr. Shriram.
 

ENDS

Koteshwar Prasad Dobhal
Consultant (PR)