FICCI wants 2 pc cut in rates

FICCI wants 2 pc cut in rates
ENS ECONOMIC BUREAU

Mumbai, Feb 2: The Federation of Indian Chambers of Commerce & Industry (FICCI) has made a strong plea for reduction in interest rates, at least by two percentage points, so as to help bring core sector companies back on the rails.

"Although the industrial growth has been quite impressive, core sectors like cement, steel and textiles continue to languish. We need to look at ways to bridge the dichotomy between the knowledge-based industries and core sectors like cement, steel and textiles," Ficci president GP Goenka said.

The chamber top brass will meet the Reserve Bank governor Bimal Jalan tomorrow to apprise him of the apex chamber's concerns on the prevailing interest rates.

"The reduction in the interest rates is long overdue. The delay in announcing the reduction of interest rate by the central bank has belied the expectation of the business community and RBI should take steps to bring about the rate cuts at the earliest," Goenka said.

"At the prevailing rates, the crucial sector players arefacing it difficult to compete with international companies. The industry is looking forwrd to a reduction in the interest rate as a sequel to government's decision to bring down the rate of interest on small savings and public provident fund," Goenka said. The apex chamber has also suggested the setting up of a tripartite body - with representatives from the government, industry and financial institutions - to explore ways to revive the core sector. "We would also like the employees to be involved in this exercise of bridging the core and non-core sectors in terms of growth and prosperity. We are not a banana republic and core sectors are very important for our economic growth," Ficci secretary general Amit Mitra said.

The apex chamber has cautioned that the Union government should not lose sight of the core manufacturing industries in its zeal to further boost the growing information technology (it) sector. "We are not against the incentives that are provided to the IT sector. All we are saying that coresector industries like steel, cement and textiles are equally important and should not be ignored," Goenka said.

On the recent government decisions on disinvestment and privatisation of public sector units, Ficci has said the steps were in the right direction and should gain momentum in the coming months.

Ficci has also lauded the handling of the strike at the Uttar Pradesh State Electricity Board in connection with the trifurcation of the utility into separate entities for generation, transmission and distribution.