CII seeks reduction in repo rate, CRR
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The Confederation of Indian Industry (CII) has taken a strong note of the industrial slowdown seeking reduction in both the repo rate and the cash reserve ratio (CRR) by the Reserve Bank of India (RBI).
The CII said the sharp fall in manufacturing was of particular concern and demanded that RBI reduce repo rate by 50 bps and CRR by 50 bps.
"While fully appreciating the imperative of anchoring inflation, it is CII's view that RBI now needs to intervene and reduce interest rates since a complete sacrifice of growth is not in the interest of the economy," said Chandrajit Banerjee, Director General, CII.
The September index of industrial production (IIP) figure earlier pointed out the slowdown in the industrial production. The IIP data, which pointed out the drop in industrial output in September, contract by 0.4 per cent was due to the dismal numbers of the manufacturing sector and decline in the consumer as well as capital goods output.
Earlier, Montek Singh Ahluwalia, Deputy Chairman, Planning Commission, had also expressed "concern '' over the decline in the industrial output. Ahluwalia termed the decline as "very disappointing'' . The IIP data showed a negative growth in capital goods sector as well.
CII said the September IIP figures are a corroboration of the apprehension of the CII on "industrial slowdown'' . "A tight monetary environment has been putting pressure on demand which has been manifest for some time now," stated CII in a statement.
Banerjee said in order to improve industrial output in the country there is a need for setting up of National Investment Board.
"In order to shore up demand, it is also time that National Investment Board be made a reality. Demand creation has to be the priority for the government and RBI," he added.
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