New Delhi: India Inc on Wednesday expressed disappointment over RBI's decision to hold fire, saying there is a need to revive domestic demand and encourage investment through lower cost of capital to crank up growth.
(From right) CII President Shobana Kamineni, Assocham President Sandeep Jajodia and FICCI President Pankaj Patel during the 3rd meeting of Pre-Budget Consultative Committee in connection with the forthcoming Union Budget 2018-19, in New Delhi on Wednesday
He observed that a reduction in interest rates would give the necessary signal that fiscal and monetary policies are working in tandem to give a boost to growth.
"While inflation weighed on the decision of the Monetary Policy Committee of the RBI, the growth concerns cannot be brushed aside either, as the cost of capital is still high in India," Assocham President Sandeep Jajodia said. India Inc, he said, continues to remain over-leveraged while consumer demand is still subdued.
The Reserve Bank decided to hold the policy rate, on expected lines, but raised inflation forecast for the remainder of 2017-18 to 4.3-4.7 per cent. The RBI could have joined the government in helping the exporters by reducing the cost of borrowing, said EEPC India Chairman T S Bhasin.
Tags: Central Bank