Industry Presses RBI For Interest Rate Cut


NEW DELHI: Expressing serious concerns over the industrial output remaining flat at 0.1 percent, India Incorporation reiterated its demand for an interest rate cut by the Reserve Bank to kick-start investments, especially keeping in view the fall in retail inflation.

"What is extremely worrisome is that the decline in investment and consumption demand is showing no signs of reversing," CII Director General Chandrajit Banerjee said.

"The decline of CPI inflation should spur the RBI to give predominance to growth and cut interest rates," he added.

Easing onion and potato prices pulled retail inflation -month low of 8.1 percent.

"Negative growth in manufacturing, though seems to be waning, remains a cause of concern. Depressed demand and investment conditions continue to plague the sector. With little room for any new policy measure to address the slowdown, we expect the sector to register a subdued growth in next few months," Ficci President Sidharth Birla said.

"With the trend reflected in retail inflation and IIP data released today, we see no reason why the RBI should not bring the focus back on growth and cut interest rates in the forthcoming policy announcement," he added.

The RBI, which has maintained a hawkish interest rate regime to tame inflation, is scheduled to announce the next monetary policy on April 1.

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Source: PTI