Commenting on the monetary policy statement, Mr Pankaj Patel, President, FICCI, said “The 25 bps cut in repo rate is a welcome move. The current situation, however, warranted a steeper cut of 50 bps in the repo rate. The private investment cycle remains weak and the reduction in the rate will be an investment sentiment booster. According to FICCI’s latest Business Confidence Survey findings, companies are still operating at suboptimal capacities and the demand conditions also remain a concern for businesses. Normal monsoon and forthcoming festive season is expected to aid rural consumption and a further decline in lending rates will send a positive signal to investors as well as consumers.”
“Further, the setting up of an Internal Study Group to study the marginal cost of funds based lending rate (MCLR) system with the objective of improving monetary transmission is a positive step. FICCI also looks forward to constitution of a High-level Task Force which would put in place a transparent and real time Public Credit Registry system”, added Mr. Patel.