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New Delhi: Industry body Assocham has asked the Reserve Bank of India (RBI) to bring down key policy rates by up to 50 basis points as easier access to liquidity still remains a problem for India Inc.
‘More measures to boost economy in offing’
“Since (the) interim budget did not offer any rate cuts in direct and indirect taxation nor could it provide any concessions in existing corporate taxation... (we have) pinned all hope on the RBI for at least a 50 basis point cut in CRR, repo rate and re verse repo rate, so that the industry is able to access liquidity at relaxed rates,” Assocham said.
RBI offers Rs 59,230 cr at special repo
This is immediately required to give a booster to the industry so that it comes out of existing credit squeeze problem and increase consumption of money for accelerating manufacturing, it said in a statement.
The country's industrial output contracted for the second time in this fiscal by two per cent in December, after falling by 0.43 per cent in October.
Further, Assocham has also sought cut in statutory liquidity ratio - the amount banks require to maintain in the form of cash - by four percentage points to 20 per cent.
At present, the cash reserve ratio (amount that banks are mandated to park with the RBI) is at five per cent, while the repo (rate at which banks borrow from the RBI) and reverse repo rates, are at 5.5 per cent and four per cent, respectively.
