June 7, 2019
Reduce Repo Rate at 4% in phases as well Rationalize CRR: PHDCCI
PHD Chamber of Commerce and Industry (PHDCCI) on Friday urged the RBI to further slash the repo rate and pro-actively consider reducing the limit of Cash Reserve Ratio (CRR) to make sure that private investment picks up to fuel the growth rate and the sagging economy begins to grow and expand.
It has also made a prognosis that both SENSEX and NIFTY would commence inching up with stable government in place in India under Prime Minister Mr Modi which would attract huge investments from FPIs, FIIs, Private Equities and host of other such entities and spur up economic activities with aggressive pace. Its fall out is bound to stoke manufacturing and services to transform India both economically and socially.
The aforesaid observations were made during an Open House Discussion on Post Election Market Outlook of Various Asset Classes held here under aegis of PHDCCI which was presided over by its Senior Vice President, Dr D K Aggarwal in which host of experts took part.
Dr Aggarwal pointed out that liquidity in the system is still a critical issue for industry and though the RBI has curtailed the repo rate by 25 basis points in its monetary policy yesterday, it is not commensurate with industry’s expectations and aspirations and therefore, series of such cuts are called for until the repo rate is brought down to 4% from its current level of 5.75%.
According to him, even the limit of CRR that currently prevails in the system needs a review so that non-availability of liquidity is adequately addressed and industry is disbursed the capital it requires for funding economic activities and industrial expansion. Dr Aggarwal also felt that investors in equity markets should invest in all blue chips companies and government securities including debt funds with long term perspective so as to ensure a 15% rate of return in their investments.
Chair, Foreign Trade & Investment Committee, PHDCCI, Mr Vijay Mehta also endorsed the views expressed by Dr Aggarwal adding that capital market is likely to be well oiled in general in near future and it would witness reasonable jumps in case India gains in good monsoon with its good spread and other better and reformed policy measures followed by the current regime.
Chair, Gems & Jewellery Committee, PHDCCI, Mr Ajay Mehra demanded that a suitable mining policy should be brought in so that bullion realizes its real potential with good gold policy in place.
Among others who were also present on the occasion comprised EVP, Market & Corporate Affairs, India Infoline, Mr Sanjeev Bhasin; General Manager, Bombay Stock Exchange, Mr Pankaj Sangal; Founder, Entry India, Mr Navin Pathak; Sr Advisor, Grant Thronton, Mr Yogesh Mathur; Chair, Capital Market Committee, PHDCCI, Mr B K Sabharwal; Co-Chair, Economic Affairs Committee, PHDCCI, Mr Ambuj Jain and its Chief Economist, Dr S P Sharma.
Koteshwar Prasad Dobhal