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Apex industry chambers were disappointed with the Reserve Bank of India (RBI) choosing to keep all basic policy rates unchanged in its mid-quarter review of monetary policy.
“A cut in the policy rates could have given some boost to the industrial sector particularly when the growth rates had plummeted to 5.3 per cent in the last quarter,” said Mr Rajkumar Dhoot, President of the Associated Chambers of Commerce and Industry of India (Assocham).
The Confederation of Indian Industry, while expressing disappointment, said that monetary stimulus was required when the space for fiscal manoeuvrability is limited, given the very large fiscal deficit and inflationary pressures being alluded to are the results of structural problems on the supply side.
Following the line of argument, industry body FICCI said: “In the absence of structural reforms by the government and continued high interest rate policy by the RBI, the economy is headed for a long period of ‘slowflation’.”
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