Expressing disappointment over the poor show on industrial production in September, India Inc on Monday pressed for a rate cut by the Reserve Bank of India (RBI) to boost production and further revive growth. Industry chamber CII said RBI should intervene and cut interest rates.
“While fully appreciating the imperative of anchoring inflation, it is our view that RBI now needs to intervene and reduce interest rates, since a complete sacrifice of growth is not in the interest of the economy,” CII Director-General Chandrajit Banerjee said.
Sharing similar views, Ficci President R V Kanoria said he hopeed RBI would relook at its monetary policy in the light of latest IIP figures and reduce interest rates.
Assocham Secretary-General D S Rawat also said RBI needed to take a constructive view while announcing the next credit policy.
RBI has refrained from cutting interest rates, fearing it could fuel inflation. The central bank is scheduled to come out with the next mid-quarter policy on December 18.
Industrial production contracted by 0.4 per cent in September on account of a dismal performance by the manufacturing and capital goods sectors.
Also Read
The industrial output growth rate turned negative in September after showing 2.3 per cent growth in the previous month. The index of industrial production (IIP) was 2.5 per cent in the corresponding month last year. The country’s economic growth rate during the first quarter of the current year was 5.5 per cent.
Recently, RBI in its half-yearly review of monetary policy, had sharply lowered this year’s economic growth projection to 5.8 per cent, from 6.5 per cent estimated earlier.