NEW DELHI, Jan 15: India Inc today lauded interest rate cut by the Reserve Bank of India (RBI) stating it would propel the investment demand and spur spending in rate sensitive consumer durables.
“Reduction in repo rate has come as a positive surprise in the new year and would be a huge mood lifter for investors who have been grappling with subdued demand conditions”, said Chandrajit Banerjee, Director General, CII.
Mr Banerjee said going forward, CII hopes that while maintaining a delicate balance between growth and inflation, the RBI would shift its stance in favour of growth, given that the trend in inflation was clearly subdued. “The move is in line with industry expectations and would help to revive growth and encourage investment. RBI views that any further cut in rate would depend upon further moderation of food inflation and current account deficit is well acknowledged. This move will bring cheer for industry, economy as a whole and for the common man”, Rana Kapoor, President ASSOCHAM said.
The Government has a critical role to play in this regard by remaining committed to fiscal consolidation, easing the supply bottlenecks and improving governance surrounding project implementation, said Mr Kapoor. In a surprise move, the RBI today cut the policy repo interest rate by 25 basis points from eight per cent to 7.75 per cent.
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