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Industry welcomes move

NEW DELHI: Indian industry on Saturday welcomed the steps taken by the Reserve Bank of India (RBI) to pump in more liquidity into the system to take care of the slowdown in the economy. Industry associations have, however, demanded more fiscal measures to support worst-affected sectors such as automobiles and white goods.

All leading trade and industry chambers said the package on rate cuts and monetary support for housing and small and medium enterprises was not enough, and they were now looking towards the Government’s stimulus package that is likely to be announced on Sunday. They feel that the current situation needs more drastic fiscal steps to save the economy from going into recession. According to Federation of Indian Chambers of Commerce and Industry (FICCI) President and MP, Rajeev Chandrasekhar,

“The rollback needs to be to 2004 levels. It is clear that to restart the economic momentum, the accompanying fiscal steps are critical.”

Similarly, FICCI Secretary General Amit Mitra said the RBI could have gone a step further by cutting the Cash Reserve Ratio (CRR) and the Statutory Liquidity Ratio (SLR) rates to send a stronger signal of liquidity support to the corporate sector.

The Confederation of Indian Industry Director General Chandrajit Banerjee said that after steps by the RBI, the industry and corporate sector were now hoping for more relief from the Prime Minister’s stimulus package that is likely to pump in Rs. 17,000 crore for automobile, housing and exports sectors.

Similarly, the Associated Chambers of Commerce and Industry of India (Assocham) President, Sajjan Jindal, said: “The cut in rates is not enough as the economic situation calls for drastic fiscal measures.”

The Federation of Indian Export Organisations (FIEO) said banks should now cut interest rates. “Recession is even deeper than one thought, so the government should supplement the endeavour of the RBI expeditiously and announce an interest subvention scheme for exports along with other measures immediately,” said FIEO President G. K. Gupta.

“As recession is even deeper than one thought and recovery is likely to take longer, the Government should supplement the endeavour of RBI expeditiously and announce interest subvention scheme for exports along with other measures immediately,” he added.

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