ASSOCHAM

CORPORATE/POLICIES

Monetary policy lacks aggressive action: 

ASSOCHAM

Reacting to the Monitory Policy announcement, ASSOCHAM President, Mr Rajkumar Dhoot, said “the industry is disappointed that the key policy rate, the repo rate, has not been reduced and rather all through, the focus continues to be on   managing inflation with the growth continues to suffer”

The ASSOCHAM chief lamented that through the experiment from the last two years to hike the interest rates to contain  inflation ,has not delivered the desired results yet the consequential impact has been slowdown in the growth momentum, with  increasing cost of finance hampering investments.

Mr. Dhoot while welcomed 25 bps reduction in  CRR said “ RBI should reconsider its decision as the recent ASSOCHAM study on MSMEs has revealed that more than 25% of the units employing lacs of workers, are struggling for survival.

The reconsideration has been necessitated, said ASSOCHAM chief, in the light of the recent government roadmap on fiscal consolidation and a host of reforms announced to perk up the business environment.  Mr. Dhoot also questioned the growing level of NPAs in the banking sector which  in  long term are likely to  shoot up in  SMEs and  several other sectors like real estate. This will have a very adverse impact on inflation. Therefore there is no reason for holding back the lending rate cut any more, he asserted.