To check online frauds, Dhoot called for implementation of digital signature enabled techniques as stipulated in the monetary policy statement for 2011-12. At the same time, the reforms process needs to be speeded up and policies must see fast implementation on the ground level.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) on Tuesday urged the Reserve Bank of India (RBI) to reduce cash reserve ratio by another 75 basis points and repo rates by at least 50 basis points to reduce the cost of borrowing that will encourage fresh investments and spur growth. “The economy is going through a very difficult patch and business confidence has plummeted. New investments have slowed down,” said Rajkumar Dhoot, President of The Associated Chambers of Commerce and Industry of India (ASSOCHAM) during his interaction with RBI governor D. Subbarao ahead of the central bank’s monetary policy review on April 17.
The industry – particularly manufacturing – has been affected by moderation of demand besides high input and capital costs. In the services sector, large firms registered growth with some fall in profits. But small firms suffered on both counts, said Dhoot. High inflation and tapering of demand in interest-sensitive sectors come amid global macro-economic conditions which are not conducive anymore for raising low-cost funds. The sharp depreciation of rupee during August to December last year led to drying up of foreign equity flows.
“The RBI’s monetary tightening has added to the low business confidence and affected financial bottomlines, leading to deceleration in investments,” said Dhoot. “The low capital spending could not help generate supply response required for controlling inflation and ensuring long-term growth. There exists a need for interest rates on borrowings to be brought back to 10 per cent level.”
To check online frauds, Dhoot called for implementation of digital signature enabled techniques as stipulated in the monetary policy statement for 2011-12. At the same time, the reforms process needs to be speeded up and policies must see fast implementation on the ground level.
