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Last Updated : Jun 16, 2011 01:36 PM IST | Source: CNBC-TV18

Need more coordination between RBI, Govt on policies: FICCI

Rajiv Kumar, Director General, FICCI in an interview with CNBC-TV18 said gave his views on macro economic factors like inflation, IIP numbers, GDP growth and cycle of interest rates hikes by Reserve Bank of India (RBI).


Rajiv Kumar, Director General, FICCI in an interview with CNBC-TV18 said gave his views on macro economic factors like inflation, IIP numbers, GDP growth and cycle of interest rates hikes by Reserve Bank of India (RBI). 


He said, "According to me, the government and the RBI now must now synchronize their efforts. While the RBI is announcing the rate hike the government must announce measures to restore the investors confidence in the economy and improve investors sentiment."


Below is the verbatim transcript of his interview with Latha Venkatesh and Sonia Shenoy of CNBC-TV18. Also watch the accompanying video.


Q: Inflation is at 9% even without a diesel hike, does the Governor really have a choice but to hike rates?


A: I don't like it but, I have to admit that the Reserve Bank has hardly any option but, to raise interest rate. I hope it is not by 50 basis points (bps) but 25 bps points because 50 bps might well be too much of a shock therapy for the economy to absorb. It could be sort of sort of medicine that might put the patient in a state of downward spiral.

According to me, the government and the RBI now must now synchronize their efforts. While the RBI is announcing the rate hike the government must announce measures to restore the investors confidence in the economy and improve investors sentiment. If that is done then the medicine would be palatable if not I

First Published on Jun 16, 2011 12:37 pm