Growth on the backburner

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“Holding on repo rate twice indicates growth on the backburner, eyes on inflation targets”, says Dr Niranjan Hiranandani, President - Assocham & NAREDCO. He says that “After the fiscally lacklustre economic budget, the RBI's accommodative stance by unchanged repo rate at 5.15 per cent is a jolt to the economic growth momentum. A fiscally prudent approach to keep the inflationary target in control even with liquidity lying surplus in the economy has added woes to the burgeoning liquidity crisis prevailing deep into the economy. Reduction in repo rate would have surely helped demand uptick across the industries and brought in some relief to the end-users with transmitting rate cut benefits down the line. We expect fiscally stimulating measures to enhance credit supply in the economic ecosystem to address dire need of liquidity crisis and bridge the widening trust deficit.

Also, RBI's decision to grant an extension of the date of commencement of commercial operations for project loans for commercial real estate would complement the government's initiatives for the real estate sector. The positive output performance of core sectors and thrust to retail loans for specific sectors like auto, residential real estate, and MSME's will certainly uplift the confidence and push the demand -consumption economics.

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