'It is highly unfortunate that RBI Governor has missed the golden opportunity to revive Indian economy as instead of announcing steps to rejuvenate domestic trade and industry as he has given over weightage to political consideration rather than addressing the economic compulsions'-said the Confederation of All India Traders (CAIT) while strongly criticizing the credit policy announced today by RBI Governor.
CAIT National President Mr. B. C. Bhartia and Secretary General Mr. Praveen Khandelwal in a joint statement released today at New Delhi said that the festival season and harvesting of crops is round the corner. The RBI Governor could have taken concrete steps to increase liquidity in the market by reducing Current Reserve Ratio (CRR), which could have infused more money into circulation in the market but it seems that in the days to come, the market is going to face liquidity crisis. At a time when Indian currency is being devalued greatly, giving boost to the growth of domestic trade and industry could have been the only viable option to strengthen the economy.
Both Mr. Bhartia and Mr. Khandelwal said that contrary to expectations of trade and commerce, the RBI Governor has increased Repo rate by 0.25 percent bringing it to 7.50 percent, which will hit the already ailing "aam aadmi" from further inflation. The EMI is expected to go up by Rs. 16.50 per one lac loan taken and the availability of funds with common man will go down, which will result in lowering the expenditure in the market.
It will hit the trade and industry, which was expecting good demand particularly because of festive season. The domestic Indian products will become more costly and the market will be further flooded with imported goods particularly from China and other countries.
Keeping into consideration the economic situation and failure of the RBI to announce effective steps to tame inflation and addressing the economic crisis, the CAIT has demanded transfer of powers of RBI to Ministry of Finance. This should form a Competent Committee of Experts and Stake holders to consider seriously the steps needed to be taken to infuse a sense of growth in domestic manufacturing sector and retail trade and to recommend the government with suggestive steps.