It could well be one of the most critical monetary review policies by the Reserve Bank of India (RBI) on Tuesday as companies and industry bodies wait anxiously for the apex bank’s directives.
Rana Kapoor, managing director and chief executive officer Yes Bank and president of Assocham, said a status quo on policy rates would be a positive message by the RBI indicating that lending rates would ease in the near future and the recent measures undertaken by it were only aimed at the currency market.
He underlined that overall gloomy sentiments have dampened investments but not interest rates. “Interest rates have not been a deterrent (for investments) as the real interest rates are not very high considering that inflation is high,” Kapoor told Hindustan Times.
According to Assocham, the growth rate this financial year would be about 6% even though last week Crisil lowered its growth projection for the country to 5.5% from 6% projected earlier.
“We are having a good monsoon this year and along with that the reform process should be able to push growth to a satisfactory level in the second half of the financial year… government spending will also accelerate due to elections in many states and this will also help in boosting growth,” Kapoor said.
He also stressed the need to ink a free trade agreement (FTA) with China.
“The China market would be a game changer and FTA with China is key to expand our exports… China too recognises that it needs India for its own products,” he added.