India Inc on Tuesday expressed its disappointment over the Reserve Bank of India's (RBI) decision to maintain its policy rates unchanged in its first monetary review for the 2015-16 fiscal.
Industry chamber Federation of Indian Chambers of Commerce and Industry (FICCI) said it was hoping for a continuation of the rate cut cycle by the RBI in its first monetary policy review for 2015-16.
"Of greater concern to industry is the fact that the transmission of the rate cuts introduced earlier by the RBI has not happened at the level of the banks," said Jyotsna Suri, FICCI president.
Suri pointed that the decision of RBI to examine and issue guidelines for remuneration of non-executive directors, other than part-time chairman, of banks is a welcome move.
Commenting on the First bi-monthly monetary policy review of the current fiscal, Confederation of Indian Industry (CII) President Ajay S. Shriram said the RBI decision reflects a very cautious approach towards anchoring inflationary expectations.
Shriram pointed out that the RBI had enough space to cut rates given the fact that there has been a drastic decline in crude oil and commodity prices.
"A cut in policy rates even by a modest 25 basis points would have been a mood elevator and propelled industry and consumers to augment demand," said Shriram.
"This is especially required to provide a fillip to growth in the employment-intensive auto, consumer durables and housing industry," Shriram added.
Industry lobby PHD Chamber of Commerce and Industry, too, expressed its disappointment at the status quo maintained by RBI.
"Industry is facing a tough environment as the demand is decelerating and costs of doing businesses are rising," said Alok B. Shriram, president, PHD Chamber of Commerce and Industry.
"There must be transmission by the banks of the front loaded repo rate cut by RBI to the lending rates," added Shriram.