Govt measures to revitalize growth

FICCI is hopeful that the latest repo rate cut by RBI will revive demand especially during the festive season in October 2019.

“We are hopeful that the slew of these timely rate cuts will provide much-needed support to the demand pulse. Moreover, the festive season has already begun and we are hopeful of a pick-up in consumption activity,” FICCI president Sandeep Somany said on 4 Oct welcoming the latest rate cut by RBI.

“Even though the GDP growth estimate has been revised down to 6.1% for 2019-20, the measures announced by the government and the stance undertaken by RBI impart confidence. The cut in the corporate tax rate, further easing of FDI norms, and enabling provisions with regard to housing and export sectors bode well for propping up of the supply side of the economy.

The 25-bps cut in the repo rate along with the mandatory linking of floating rate loans to an external benchmark from 1 October should trigger an improved transmission of policy rate cuts and lower the lending rates going ahead, he said.

“The accommodative stance with regard to monetary policy is in conjunction with the announcements made by government over the past few weeks to revitalise growth. With monetary and fiscal policy working in tandem, we are hopeful that a revival in the growth should not be too far away,” added Somany. fiinews.com