50 bps repo rate cut likely to stoke up manufacturing growth: PHD Chamber

50 bps repo rate cut likely to stoke up manufacturing growth: PHD Chamber

50 bps repo rate cut likely to stoke up manufacturing growth: PHD Chamber

 

No.PR-102
September 29, 2015
New Delhi

 

50 bps repo rate cut likely to stoke up manufacturing growth:  PHD Chamber
 

Welcoming 50 basis points cut in repo rate by the Reserve Bank of India, President, PHD Chamber Mr. Alok B. Shriram, said, “the much awaited move would stimulate demand and boost manufacturing sector’s growth”.
 

According to him, demand in rural area is expected to revive as the cut in policy rate is going to help the rural people in fulfilling their needs in terms of buying consumer durables’ vis-a-vis reduced costs of credit.
 

Keeping in view the WPI inflation in negative trajectory (around (-) 5% in August 2015) and CPI inflation in the comfortable zone (about 4% in August 2015), it becomes inevitable that interest rate environment is in sync with declining inflationary scenario, added Mr. Shriram.
 

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

Inducing demand scenario would strengthen industrial growth trajectory and create jobs for millions of young work force. To spur industrial growth (IIP), which is merely growing at a rate of 3.5% in April-July 2015-16 and enhance our exporters’ competitiveness in the international markets, conducive policy environment becomes crucial, said Mr. Shriram.
 

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

We appreciate and congratulate the Government and RBI on various calibrated steps to stabilize the price situation in the economy, which with reduced costs of borrowings is expected to improve the livelihood of common man, he added.
 

Continuation of rate cut in the coming times would be critical to help demand to remain intact and sentiment for investments to strengthen and grow. Therefore, repo rate must not be more than 6% to induce demand and refuel industry growth at this juncture, added Mr. Shriram.
 

We believe higher industrial growth vis-a-vis strong demand scenario coupled with speedy implementation of reforms and ease of doing business will push our economy in higher growth trajectory, said Mr. Shriram.
 

ENDS

Koteshwar Prasad Dobhal
Consultant (PR)