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25 bps repo-rate cut by RBI too little too late; 50 bps cut need of the hour: Assocham
Reacting to the 25 basis points cut in repo rate by the RBI today the Associated Chamber of Commerce and Industry of India (Assocham) said the 25 basis points cut in interest rate, though on expected lines, was too little and too late to infuse the consumer demand which should then induce investment.
Assocham's president Rana Kapoor in a statement said that RBI Governor Raghuram Rajan himself had acknowledged the fact the investment in the economy is weak and corporate results poor, but still he has refrained from taking somewhat bolder steps.

"At least 50 basis points cut in the Repo rate was required along with a reduction in the Cash Reserve Ratio (CRR) so that banks are able to reduce their cost of funds," said Rana Kapoor.

In a press release Assocham president said that the industry agrees with the RBI Governor that the primary objective is to keep inflation under control, but the fact is that the country's headline inflation has remained in negative for months together and CPI- numbers well below the RBI targets.

He said that it was time growth was given the focus, otherwise, growing at the fastest rate in the world in terms of GDP ahead of China, would only remain a hype.

Moreover, the problem of stressed assets has also a relationship with the interest burden that the promoters have to bear. Servicing high debt with high cost of borrowing becomes unviable. 

However, the Assocham welcomed RBI Governor, Raghuram Rajan's concern for stressed projects and his desire that adequate liquidity is provided to them to kick-start them again.

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