Assocham bats for lower interest rates

RBI should lower interest rates to boost industry growth and exports, industry body Assocham said today. "From the chamber, we are requesting both the RBI and government to lower interest rates. But after talking to them, there are larger issues for which RBI is not keen for a drastic cut in rates," Assocham President Sunil Kanoria said.

Food inflation, which is not high but moderate, is the major concern of the central bank, Kanoria told reporters here. "From the monetary policy side, RBI does not want to reduce interest rates drastically," he said. Kanoria also said that there were other areas which could be improved to make Indian industry cost-competitive.

He said that if transportation and logistics costs came down, then too industry would become competitive. Interest rate is not the only issue here, he said. Kanoria said the government needs to consider hiking capital expenditure, after which private investments would flow in automatically.

"We are looking at a hike in public expenditure which would generate internal demand," Kanoria said.