The Hindu Business Line : Chamber seeks reduction in interest rates

Addressing the 151st AGM of Cochin Chamber of Commerce and Industry here, Mr Sajjan Jindal, President of Assocham said that they would submit a strategy paper to the RBI Governor shortly in which it will urge the premier bank to further lower CRR to 2004 level of 4.5 per cent and bring down the statutory liquidity ratio by 2-3 per cent.

As far as GDP growth rate is concerned, he said that Assocham was hopeful that it would be around 7.5 per cent to 8 per cent, after the current slowdown in GDP growth, because of the sound fundamentals of Indian economy and proper regulatory mechanism on financial institutions including banks.

Positive indicator

The hike in pay package of government employees will kick demand for industry which is a positive indicator. In a nutshell, Assocham believes that 2008-09 will close with 7.5 per cent to 8 per cent GDP growth, he added.

To support his view, Mr Jindal said that agriculture is expected to grow well in 2008-09. With good monsoon, the kharif crop is good. If the Rabi harvests are good as well, Assocham is expecting 7 per cent agriculture growth. Currently, agriculture accounts for 18 per cent of GDP. Its contribution should be 1.3 per cent points of GDP growth.

Assocham has been constantly receiving reports from all segments of Indian industry that banks are still scared to lend. The Chamber has sought that Monitoring Cell should be urgently created within the RBI to monitor banks lending to Indian Inc.

It will also propose setting up a sovereign fund with a corpus of at least $ 25 billion to support the equity of well run Indian listed companies and mutual funds.

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