The fifth-rate cut announced by the RBI's monetary policy committee (MPC) will revive investment and encourage consumption, India Inc said on October 4. These reactions followed the anticipated rate cut of 25 basis points (bps) announced by the central bank.
The new benchmark lending rate now stands at 5.15 percent and will be able to kick-start the currently sluggish economy as per the industry reactions.
The industry also emphasised that banks needed to facilitate a faster policy transmission to borrowers.
The RBI's latest move to trim repo rate comes at a time when the economic growth has slowed down. The April-June quarter saw a six-year low GDP of 5 percent. This is the fifth straight rate cut by the central bank in as many policy reviews in 2019, and takes the total quantum of reductions to 1.35 percent.
CII Director General Chandrajit Banerjee said that the cumulative 135 bps rate cuts this year along with a slew of measures announced by the government to provide growth stimulus to a variety of sectors is expected to lift growth from its current stupor and unleash animal spirits.