Dear Members of the Media,
Would be most obliged if you could kindly carry the appended press release in
your esteemed Newspaper.
Thanks and warm regards,
John
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John S. Fernandes
Executive Officer - Goa State Office
Confederation of Indian Industry
502, Unitech City Center,
M. G. Road, Panaji, Goa 403 001
Tel: 0832 - 2422790 / 2422796 / 9822982979
e-mail: ciig...@dataone.in ; cii...@bsnl.in ;
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Before printing, think about ENVIRONMENTAL responsibility.
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CRR Cut by RBI Welcome : Mr. Chandrajit Banerjee, Director General, CII
The move by the Reserve Bank of India to cut CRR by 50 bps to 5.5 percent is a
very welcome measure. This will help ease the liquidity situation in the
banking system which has remained tight since November 2011. This gives a clear
signal that the RBI has recognized the challenges to growth owing to a
weakening demand condition and has started to address that after successive
increases in the headline interest rate cumulating to 375 bps. It appears that
the RBI has been bold on this front and CII congratulates the RBI Governor for
his decision.
CII has noted with concern, the RBI's downgrading of GDP growth forecast for FY
12 to 7 percent and non-food credit growth to 16 percent. CII has also noted
the RBI's observations on the challenges being posed by a high fiscal deficit.
In our Pre Budget Memorandum, we have pointed out this to be one of the
greatest risks facing the country and therefore, CII has suggested that there
be a clear roadmap for bringing down fiscal and revenue deficit to 3 percent
and zero percent respectively over the next five years.
While CII agrees with the outlook of the RBI, we believe that sooner than
later, the RBI needs to start reducing the repo rate as well in order to start
the investment cycle, which has weakened. However, it appears implicit in the
RBI's statement that the RBI would wait for the Government to signal deficit
management before interest rate cuts. CII feels that a coordinated response
from the Government and the RBI is in order, like it was observed when the
economy was in crisis in 2008-09.
New Delhi
24th January 2012
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Protect Goa's natural beauty
Support Goa's first Tiger Reserve
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