The Federation of Indian Chambers of Commerce and Industry (Ficci) has decided to approach the government to apprise it of the seriousness of the current financial turmoil and present its views on dealing with the situation.
While reiterating the need to cut the cash reserve ratio (CRR) by another 200 basis points and bring it down to the level of 5 per cent that prevailed in 2004, Ficci also wants that the repo rate should be cut 50 basis points immediately and be gradually brought down to the 2003 level of 5 per cent.
To tackle the liquidity and credit crisis, the industry body had planned a joint meeting with the other leading industry bodies — the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry of India (Assocham) — in order to finalise a common list of demands.
On Thursday, Ficci President Rajeev Chandrasekhar had said the three industry chambers would jointly approach the government in the coming week to discuss the seriousness of the problem of the current crisis.
A CII official said they had received a communication from Ficci and were yet to take a decision on the joint meeting with other industry bodies.
An Assocham spokesperson said: “As of today, there has been no official communication on this. But we are open to the idea where we all can sit together and find a common solution to help industry.”
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On his part, Chandrasekhar says if Ficci does not get the support of other industry bodies, it plans to meet the government on its own next week, immediately after Diwali, to present its views.
Earlier, CII had demanded a reduction in the repo rate by at least 50 basis points and a 150-basis-point cut in the CRR to ensure adequate liquidity and access to cheaper funds.
In addition, it had demanded liquidity for mutual fund and non-banking financial companies, in order to enable orderly operation of financial markets. The industry body has also asked for the government to guarantee all bank deposits for a two-year period so as to maintain depositor confidence in the Indian banking sector.
Assocham also wants the repo rate to be brought down to 7 per cent and the CRR to 6 per cent. It has also sought that the Reserve Bank of India should create a corpus of $25 billion to fund industry. The industry association says it has already submitted strategy papers regarding this to top government and monetary authorities.