Expect cut in the key rates to be passed on by bankers translating into actual reduction in cost of credit: Ralhan
Author(s): City Air NewsLudhiana, June 2, 2015: Mr S C Ralhan, President, Federation of Indian Export Organisations (FIEO), while commenting on Second Bi-monthly Monetary Policy Statement, 2015-16 stated that RBI looking at the macro-economic...
cityairnews
Jun 2, 2015 12:30
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Ludhiana, June 2, 2015: Mr S C Ralhan, President, Federation of Indian Export Organisations (FIEO), while commenting on Second Bi-monthly Monetary Policy Statement, 2015-16 stated that RBI looking at the macro-economic data has gone for a token rate cut of 25 basis points, the third cut since January, and we hope that this would, this time, translate into an actual cut in cost of credit, given the poor off-take which has fallen to 9.9% from 13% in the corresponding period last year.
FIEO chief commented that inspite of a spike in GDP, IIP stood at 2.8% ending March 31st with manufacturing at 2.3% and exports fell for the fifth month in a row and key components recorded a milder growth in 2014-15. For instance private consumption (6.3%), government consumption (6.6%) and gross fixed capital formation (4.6%) still showed signs of inertia.
President FIEO stated that markets abroad show improvement in terms of business spending. In US new orders for non-defense capital goods (excluding aircraft), a proxy for business spending, increased strongly (+1%) in May 2015; Germany where Private consumption was up by +0.6% q/q; and China further providing a stimulus to its economy by an increase in fiscal support through infrastructure spending and tax breaks and thus possibilities of export for us seem to be improving.
Mr Ralhan said that an interest subvention notification for exports which is long overdue may help to resurrect declining export numbers. He urged the Government to quickly notify the same for imparting some competitiveness to Indian exports.
Date:
Tuesday, June 2, 2015
