 "India Inc says RBI stance expected, wants govt to expedite infra investment")
Corporate India, which is fast losing patience with the Modi government, wants the Indian government to start spending on infrastructure projects so as to stimulate the economy.
CEOs say they had no expectations of a rate cut from the Reserve Bank of India, adding that it's time the Indian government fast tracks its $350 billion of orders planned in the infrastructure sector.
CEOs say they had no expectations of a rate cut from the Reserve Bank of India, adding that it's time the Indian government fast tracks its $350 billion of orders planned in the infrastructure sector.
“I don't think corporate India is disappointed because we never expected it. This is due to the fact that monsoon is playing truant, food and vegetable prices are already northbound and I don't think Raghuram Rajan will ever take any risk on his inflation target,” said Prabal Banerji, group president, finance & strategy of Bajaj group.
CEOs say the RBI governor is on the right track as the United States is expected to increase interest rates.
“Do we think that reduction of 25 to 50 basis points is going to change investment decision in this country? Not really! Real investment cycle will start when the government starts spending big bucks in areas like infra and people start having confidence and start investing,” he added.
Else, marginal reduction in repo rate doesn't affect corporate investment decisions nor does it make a huge difference in profit or investable surplus.
“In my opinion, repo rate change is not a major policy of monetary system and economic growth and its usefulness is rather limited in overall economic play of India,” he said.
A CEO of a large firm said the Modi government is fast losing traction and unless the government stimulates the economy with new orders and infrastructure spending, the corporate earnings will continue to remain subdued.
“Just look at few marque infrastructure projects like new Mumbai airport project. The project is stalled and there is no news on that front,” he said.
“Keeping the Land Bill unchanged will just make the things worse for corporates starting new projects,” he added.
“Keeping the Land Bill unchanged will just make the things worse for corporates starting new projects,” he added.