By Shivam Saklani
India Inc. (a
common term used by the Indian media to refer to the formal sector (comprising
government and corporate) of the nation) today requested the Reserve Bank of
India to reduce key policy rates to support investments and boost economic
growth.
As per the
government data released today, inflation on food articles slowed to 4.72
percent in December, from 6.06 percent in November 2017.Inflation based on
wholesale prices eased to 3.58 percent in December 2017 as prices of food
articles declined even as fuel cost witnessed a surge.
This was
considered a reason behind the strong demand of India Inc. for policy rates
reduction. “The policymakers need to take care of the continuous rise in petrol
and high speed diesels prices due to rise in global crude oil prices, which
already is showing an impact on import bills as well as the exchange rates of
the country”, said Assocham Secretary General D S Rawat.
On the other hand, data released last week
showed that retail inflation breached the RBI’s comfort level to touch 5.21
percent in December; The RBI takes into account retail inflation while deciding
on key policy rates. In its last policy review in December, RBI had kept key
repo rate unchanged at 6 percent and reverse repo rate at 5.75 percent.
“Lowering the
repo rate in the upcoming monetary policy is critical to boost investments and
build the growth momentum” FICCI President Rakesh Shah said.
Union Budget is
expected to provide details on more specific measures towards strengthening of
agriculture sector at the same time; it would be an opportunity to include
petrol and diesel in GST, which would help in lowering the pressures of fuel
inflation.
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