IIP: Industry asks RBI to re-look at monetary policy

NEW DELHI: With the industrial production declining sharply in September, India Inc today asked the Reserve Bank, which has hiked key policy rates six times this year, to "re-look" at its monetary policy.

"In the light of IIP data, we would urge the RBI to re-look at its monetary measures and intervene in time to arrest this slowdown in manufacturing sector," FICCI Secretary General Amit Mitra said.

He said decline in manufacturing sector's growth is on the expected lines as monetary tightening by RBI was going to moderate the growth of the sector.

Besides manufacturing, sectors like chemicals, capital goods, metals and machinery also registered negative growth.

Industrial growth declined the most in 16 months to 4.4 per cent in September.

Industry chamber Assocham said the fragility of industrial recovery in the country has increasingly been manifested by these production figures.

"To some extent the dismal performance of industrial sector can be attributed to the abnormal monsoons and the resultant slowdown of production activities," Assocham President Swati Piramal said.

PHD Chamber too said the government should take urgent measures to ensure that the growth does not slide further.

"Priority should be given to availability of raw materials and credit at reasonable rates in order to boost demand and reduce production costs in industry," PHD Chamber President Ashok Kajaria said.