RBI's decision to hold key rate unchanged should support engineering goods sector growth: EEPC

EEPC India on Friday said that Reserve Bank of India's decision to hold the key lending rate unchanged should support growth but as underlined by the central bank further policy support would help industry in capitalising opportunities in the export market.

"Given that the engineering goods sector could significantly generate jobs there is a need to give further push to it by broadening credit coverage and facilitating exports," EEPC India chairman Mr Mahesh Desai said.

The RBI in its bi-monthly monetary policy kept the repo rate unchanged at 4% on expected lines. All other key rates also remain the same with the central bank continuing with the accommodative stance as long as necessary to revive and sustain growth on a durable basis.


Mr Desai noted that the engineering goods sector being labour-intensive and one of the key foreign exchange earners, a combination of monetary and fiscal support would considerably boost exports and capacity expansion to meet additional demand orders from overseas markets.

"With the right policy in place, the engineering goods sector would certainly achieve the US$107.25 billion target set for it in the current financial year," the EEPC Chairman said.

He hoped that the government would shortly announce the rates for the export promotion scheme RoDTEP and appropriate measures to calm down the prices of key raw materials, especially primary steel.

Mr Desai said that the industry is still not out of the woods as the number of Coronavirus cases has been on the rise in certain states posing downside risks to the ongoing economic recovery.