Press Release

ASSOCHAM believes it is a last rate by RBI as inflation keeps declining

ASSOCHAM said it is broadly in line with the assessment of the RBI about resilience of the Indian economy

New Delhi, February 8th 2023:  ASSOCHAM said it is broadly in line with the assessment of the RBI about  resilience of the Indian economy and the challenges ahead but going forward, expects  a stimulus to the growth trajectory as projected by the central bank, by reverting to an accommodative policy stance with regard to benchmark interest rates.

''There is no doubt that  moderating inflation in today's challenging global environment should be a priority for the RBI-Monetary Policy Committee and the RBI has done a commendable job with the result that the pace of price rise has reversed. In line with the other broad objective of sustainable growth, we want to believe this is the  last rate hike by the RBI,'' ASSOCHAM Secretary General Mr Deepak Sood said, commenting on the 25 basis points repo rate hike announced today.

Mr Sood further said, '' Given the present state of global economic environment, the RBI has struck a right balance between reining in inflation and maintaining the growth momentum. We remain optimistic that with the supply side situation improving along with a promising outlook, inflation should continue to drop giving elbow room to the RBI to reverse the policy stance into accommodative or neutral''.

The chamber agreed with the RBI assessment as regards vital macro indicators about the Indian economy. ''Our macros look far more comforting than the peers -be it stability of the Indian currency, current account deficit, external debt-GDP ratio or the foreign exchange reserves. Fiscal prudence coupled with a firm commitment by the government to remain steadfast on its capital expenditure as seen in the Union Budget give us confidence to share the optimism of the RBI projecting a growth rate of 6.4 per cent in the next financial year''.

 ASSOCHAM also welcomed regulatory measures announced by the RBI Governor Mr Shaktikanta Das. Uniform penal interest regime would be a significant customer-centric move.  Expanding scope of Trade Receivables Discounting System (TReDS) would immensely help MSMEs, while permitting inbound foreign travellers to use UPI would deepen India's digital drive , leaving global footprints.  The guidelines on the green deposits, framework on climate-related financial risks and stress testing for the banks would further  make India future ready in an environment of global energy transition.