Expressing 'surprise' at RBI's decision to maintain status quo on key policy rates, the India Inc on Friday said the central bank should have cut key rates to spur growth.
"The RBI's policy statement has taken the industry by surprise. The RBI should have sent a far stronger signal of growth while understandably, it waits to see the effects of the recent policy moves of reduction in CRR and repo rates before the next round of reduction," Ficci President Rajeev Chandrasekhar said.
The chamber said the credit policy has been framed keeping in mind the 7 per cent inflation target for the current fiscal.
"At the present juncture the need, however, was to give some critical boost to growth by pushing more credit to the productive sectors," it said. There is a need to cut the CRR by another 200 basis points and repo rate by 50 basis.
The apex bank had in the last two weeks reduced CRR by 2.5 per cent and short term lending rate by 1 per cent.
Industry body CII, however, said given that the RBI has already announced several measures over the past weeks to deal with the effects of the global financial crisis, the chamber understands that today's policy is on the expected lines.
"The fundamentals of the economy are strong and the RBI has done well to stress that India's financial sector remains stable and healthy," CII director general Chandrajit