New Delhi, 6 June (IANS). The country’s leading industry chambers on Friday welcomed the decision to cut the repo rate by the RBI to a 50 basis point cut and said that it would boil capital expenditure and consumption.
Assocham president Sanjay Nair said, “RBI MPC will increase the raise rate of 50 basis points and reduce the cash reserve ratio by 100 basis points decrease in the economy with a decrease in debt rates and will help industries to spend capital expenditure.”
This will also boost business growth through interest rate-sensitive areas such as real estate, automobile, infrastructure, exports and increase in debt in MSME sector.
Assocham General Secretary Manish Singhal said that the cost of interest rates will reduce the cost of borrowing for consumers and corporates, increase the loan demand and increase consumption again.
“Rate cuts will also benefit the agriculture sector as low rates can reduce the cost of borrowing for farmers and agricultural businesses. Also, if rural loan channels are effectively benefited through the rural loan channels, better rural demand can promote consumption.”
According to PHDCCI President Hemant Jain, the decision of RBI MPC will support India’s growth amid global instability.
“The MPC has decided to convert monetary policy trend from Acomoderator to neutral, which is inspired by strong growth possibilities, strong domestic demand and commercial exports,” he said.
If today’s cut by RBI is mixed, then the repo rate has come down by one percent since February.
Earlier, the central bank had cut 25–25 basis points in February and April.
-IANS
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