Lauding the pro-reforms approach adopted by RBI Governor Raghuram Rajan, industry body CII has expressed the hope that the central bank would shift towards an expansionary monetary policy by cutting interest rates to stimulate growth.

“The pro-reforms approach adopted in the speech has sent a strong signal that RBI would take significant steps to re-invigorate growth in the economy.

“We are certain that under his (Rajan’s) leadership, RBI would make a shift towards an accommodative monetary policy which in turn would spur investments and bring growth back,” CII President Kris Gopalakrishnan said.

Shortly after he took over as the 23rd Governor of the central bank yesterday, Rajan addressed the media, and in his speech he laid out a detailed roadmap for his innings in the short-term, which he called a “big initial package’’.

He came out with a slew of measures, including more trade settlement in rupees to rescue the battered financial markets and hinted at a shift in focus from inflation control, doggedly pursued by his predecessor, to boost growth.

Apparently reflecting a shift in the approach from his predecessor D. Subbarao, who had serious differences with the government of late, Rajan said the primary role of the bank is monetary stability to sustain confidence in the value of the rupee.

Reform initiatives

“Reform initiatives suggested by the RBI governor, particularly that of financial inclusion, facilitating investment flows, promoting financial savings, addressing the depreciation of the rupee and rising inflation are timely and reflect an innovative approach to tackle the headwinds facing the economy and revive investor confidence,” Gopalakrishnan said.

Meanwhile, the BSE benchmark Sensex today soared by 488 points in opening trade on the back of a flurry of buying by funds and investors after RBI announced a slew of measures to revive the economy amid further recovery in the rupee. The rupee gained 138 paise to 65.69 against the dollar in early trade today.

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