MSMEs unhappy; expected RBI to cut rates
Updated: Apr 01, 2014 04:50:50pm
New Delhi, Apr 1 (KNN) The industry, including the MSME sector today slammed the Reserve Bank of India (RBI) for not reducing interest rates, belying their expectations. For some it is a missed opportunity to revive growth.
“We expected the interest rates to come down 2-3 per cent but this has not happened and we are saddened,” said President, Federation of Indian Micro and Small and Medium Enterprises (FISME), D Gandhikumar.
He said the banks should consider it as their duty to help the MSME sector without being guided too much by profit.
However, the FISME President welcomed RBI advice to banks to charge a differentiated rate of interest for micro and small enterprises.
Meanwhile, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) today said the Reserve Bank of India (RBI) had the opportunity to give growth a chance to reinvigorate by reducing the policy interest rates and reviving the investor sentiment.
“RBI Governor Raghuram Rajan himself has expressed concern over the fact that subdued industrial activity continues to be a drag on the economy. The interest cost is one of the key components of the industrial output on the one side and demand revival on the other. Thus, the boost to industrial demand by lower borrowing costs deserved a consideration,” said ASSOCHAM President Rana Kapoor.
However, the chamber lauded the initiatives by the apex bank to make entry of foreign investors easy into the country’s financial markets by simplifying the KYC norms. The step would go a long way in continuation of the foreign flows which have their own positive and multiplied impact on the macro picture.
Kapoor said it would be too early to become overcautious about the renewed risks to inflation. He said the focus should be the removal of the bottleneck from the supply side and the efforts must continue in this direction by the current government.
After all, the inflation should not be made contingent on the electoral process, which should take place seamlessly. Revival of growth should become the number one priority at this point of time, he said.
Meanwhile the Federation of Indian Chambers of Commerce and Industry (FICCI) said RBI’s tweaking policy rates downwards would help lift business sentiments.
"Industrial growth remains sluggish. The improvement in January IIP numbers is meagre and there are no clear signs of growth bottoming out. Going ahead, it will be vital to strengthen the sync between government actions and RBI policy. We feel relying primarily on monetary policy for inflation management may not be a comprehensive approach,” said FICCI President Sidharth Birla.
He said administrative fixes and fiscal measures are needed to be adopted.
“This is all the more important because the inflation problem that confronts us is largely the result of supply side factors. Also, there has been an evident shift towards consumptive expenditure from investment expenditure and we need to amend this on a priority basis,” he said. (KNN/ST)
“We expected the interest rates to come down 2-3 per cent but this has not happened and we are saddened,” said President, Federation of Indian Micro and Small and Medium Enterprises (FISME), D Gandhikumar.
He said the banks should consider it as their duty to help the MSME sector without being guided too much by profit.
However, the FISME President welcomed RBI advice to banks to charge a differentiated rate of interest for micro and small enterprises.
Meanwhile, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) today said the Reserve Bank of India (RBI) had the opportunity to give growth a chance to reinvigorate by reducing the policy interest rates and reviving the investor sentiment.
“RBI Governor Raghuram Rajan himself has expressed concern over the fact that subdued industrial activity continues to be a drag on the economy. The interest cost is one of the key components of the industrial output on the one side and demand revival on the other. Thus, the boost to industrial demand by lower borrowing costs deserved a consideration,” said ASSOCHAM President Rana Kapoor.
However, the chamber lauded the initiatives by the apex bank to make entry of foreign investors easy into the country’s financial markets by simplifying the KYC norms. The step would go a long way in continuation of the foreign flows which have their own positive and multiplied impact on the macro picture.
Kapoor said it would be too early to become overcautious about the renewed risks to inflation. He said the focus should be the removal of the bottleneck from the supply side and the efforts must continue in this direction by the current government.
After all, the inflation should not be made contingent on the electoral process, which should take place seamlessly. Revival of growth should become the number one priority at this point of time, he said.
Meanwhile the Federation of Indian Chambers of Commerce and Industry (FICCI) said RBI’s tweaking policy rates downwards would help lift business sentiments.
"Industrial growth remains sluggish. The improvement in January IIP numbers is meagre and there are no clear signs of growth bottoming out. Going ahead, it will be vital to strengthen the sync between government actions and RBI policy. We feel relying primarily on monetary policy for inflation management may not be a comprehensive approach,” said FICCI President Sidharth Birla.
He said administrative fixes and fiscal measures are needed to be adopted.
“This is all the more important because the inflation problem that confronts us is largely the result of supply side factors. Also, there has been an evident shift towards consumptive expenditure from investment expenditure and we need to amend this on a priority basis,” he said. (KNN/ST)
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