New Delhi/Mumbai, May 3 (IANS) The Reserve Bank of India (RBI) in its annual monetary policy for the 2013-14 financial year, announced Friday, cut its key policy interest rate by 0.25 percent.
The following are the experts' views on the RBI move:
S. Gopalakrishnan, president, Confederation of Indian Industry (CII):
"The decision of RBI to cut the policy rates by 25 basis points, the third time during the current year, in its annual policy review, sends a strong signal that the RBI is refocusing its priority in favour of growth in view of the moderating WPI based inflation and weakening demand in the economy."
Naina Lal Kidwai, president, FICCI:
"We feels that the 75 basis points decline in the repo rate so far this year will be instrumental in reviving the confidence of the industry."
Harsh Pati Singhania, director, JK Organisation:
"Reduction in key policy rates by 25 basis points was widely expected. Also RBI's measures to restrict import of gold will have some positive impact on managing the Current Account Deficit."
A Sakthivel, chairman, Apparel Export Promotion Council (AEPC):
"These measures will spur the demand and boost the industrial output. For the easing of the tight market liquidity conditions on the backdrop of lower inflation, gold and crude prices, there was room to maneuver. Inputs cost over the times for the garment sector has escalated which results into high cost and weak profit."
Simon Rubinsohn, chief economist, RICS:
"The decision by the Reserve Bank of India to lower interest rates by 25 basis points was widely expected and had little immediate impact on markets. The latest round of monetary easing reflects in part the continuing softening in both headline and core measures of inflation on the back, the drop in global commodity prices and more specifically, local food prices."
Suman Jyoti Khaitan, president, PHD Chamber:
"Reduction in repo-rate by 25 bps may not be sufficient to revive economic growth. At this juncture, the economy needs bold steps to revive the lackluster investment sentiments to kick start growth in the economy."
Siddharth Shankar, director, KASSA Group:
"I am not sure as to how much would the 25 basis point reduction in repo rate would help the economy. To my mind, it would have very little or no impact at all. Over the last 3 months we have seen a drop of 50 basis points but that neither resulted in the demand increasing nor an increase in the credit growth."
Rajkumar Dhoot, president, Assocham:
"The EMIs for personal loans are not going to change; the interest costs for the industry is going to stay heavy and the investment trigger would stay absent."
Dinesh Thakkar, chairman and managing director, Angel Broking:
"There were two main considerations behind the continuance of the growth-supportive stance. First being the recent deceleration in economic activity along with the expectations of gradual and modest economic recovery from here on and the second being the recent moderation in WPI inflation."
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