FICCI suggests action plan to meet industry's funding needs

MUMBAI: Apex chamber FICCI on Thursday suggested an action plan to meet the funding requirements of the industry which is currently going through difficult times.

Interest subvention to select sectors, further cut in reverse repo rate, setting up of national task force for infrastructure funding are among the measures suggested by the industry body to boost the industrial activity.

In a press note, FICCI President Harsh Pati Singhania said given the current interest rate structure and the rate of inflation, the real rate of interest is in double digits. He said banks must cut interest rates and bring them to single digit level.

He pointed out that banks are parking huge funds through reverse repo window of the RBI and suggested a cut in reverse repo rate to make such parking of funds unattractive and help ensure funding needs of industry are met at appropriate rates.

Singhania said if interest rates cannot be brought down across the board, the government can consider offering interest subvention to sectors like automobiles, housing, consumer durables among others.

He said a new line of credit for commercial vehicle funding be created to boost the commercial auto segment which is under heavy stress at present.