AIAI reaction on RBI Monetary Policy
Reserve Bank of India kept the majority rates unchanged in the Monetary Policy review. The reduction in SLR will no doubt benefit and the home loans are set to become cheaper. However the need of an hour was the availability of cheaper funds for manufacturing and infrastructure sectors together with long term credit, said Mr. Vijay Kalantri, President, All India Association of Industries.
The manufacturing and MSME sector should also become beneficiary of lower SLR and should get loans at par with home loans to make economy viable and competitive. This is especially important for employment generation, export promotion and better infrastructure creation. This is the need of an hour.” The infrastructure sector is reeling under heavy pressure due to delays and confronted by earlier policy paralysis, as no pragmatic view was taken in this regard by earlier governments added Mr. Kalantri.
Mr. Kalantri further said that as inflation is well below the expected trend, it was an excellent opportunity to reduce the key rates by at least 1% to start with. Mr. Urjit Patel, Governor of RBI clearly missed the opportunity to give impetus to growth, employment and exports which are picking up.
As the Government of India is making efforts to ‘ease of doing business’ along with ‘Digital India’, ‘Skill India’, ‘Startup India’. These will become successful only if loans are available at an affordable rate. This would give boost to entrepreneurs.