Further tightening of interest rates to hamper growth: CII
Appreciating rupee and high interest rates are expected to reduce investment flow in the country, hampering the pace of economic growth, industry chamber CII said on Sunday.
By PTI |
NEW DELHI: Appreciating rupee and high interest rates are expected to reduce investment flow in the country, hampering the pace of economic growth, industry chamber CII said on Sunday.
The chamber said in the wake of moderating inflation, RBI should consider easing the monetary tightening measures introduced earlier as these norms are drastically impacting profit margins of exporters and investment rates in the country.
The Reserve Bank is to review its monetary policy on July 31.
CII pointed out that tightening of monetary policies has also lead to an about two per cent decline in non-food credit offtake during April-May.
Non-food credit reduced to Rs 18,41,656 crore from Rs 18,82,392 crore during the April-May period, CII said in a statement.
"Total bank credit also declined. This trend is a cause of concern on economic expansion and growth," CII said.
It said RBI's measures to moderate inflation have not been conducive for accelerating growth.
Any further increase in the interest rates would slow down investment in productive sectors of the economy, it said.
"RBI must ease the interest rates so that the industry is encouraged to carry on with their expansion plans. It should revise the DEPB rates and duty drawback schemes in favour of exporters," the chamber added.
The chamber said in the wake of moderating inflation, RBI should consider easing the monetary tightening measures introduced earlier as these norms are drastically impacting profit margins of exporters and investment rates in the country.
The Reserve Bank is to review its monetary policy on July 31.
CII pointed out that tightening of monetary policies has also lead to an about two per cent decline in non-food credit offtake during April-May.
Non-food credit reduced to Rs 18,41,656 crore from Rs 18,82,392 crore during the April-May period, CII said in a statement.
"Total bank credit also declined. This trend is a cause of concern on economic expansion and growth," CII said.
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It said RBI's measures to moderate inflation have not been conducive for accelerating growth.
Any further increase in the interest rates would slow down investment in productive sectors of the economy, it said.
"RBI must ease the interest rates so that the industry is encouraged to carry on with their expansion plans. It should revise the DEPB rates and duty drawback schemes in favour of exporters," the chamber added.
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