New Delhi, April 14: Industry expects the Reserve Bank of India to take necessary steps for cheap loans.
RBI governor Duvvuri Subbarao, in a meeting with the representatives of industry chamber Assocham last week, is understood to have assured them of measures for cheap loans in the forthcoming credit policy on April 21.
“Last week, we met the RBI governor. He said he was working towards a single-digit interest rate. In our view, the next credit policy should address the issue,” said Sajjan Jindal, president of Assocham.
While interest rates were hardening till July last year, the trend got reversed after the financial crisis broke out in October.
The rise in interest rates was particularly steep between October 31, 2006 and July 29, 2008 as the RBI tried to cool down the “overheated” economy by raising key policy rates .
However, the meltdown compelled regulators worldwide to ease their monetary policies. Between October 2008 and March 5 this year, the RBI had cut the repo rate by 300 basis points to 5 per cent.
However, the lending rates of banks have remained in double digits because of the high cost of acquiring funds.
Assocham is also in favour of anti-dumping measures, a hike in excise duties and changes in the goods and services tax (GST).
“We would want the government to review excise duty, have GST at 14 per cent and lend stronger teeth to anti-dumping laws to protect domestic industry,” Jindal said.
Industry wants excise duty raised back to 16 per cent. “The government gets maximum revenue from excise. We need to review it and get it back to 16 per cent. It was lowered because inflation was too high. But now inflation is near zero and therefore we need to review it,” Jindal said.
The Centre had cut excise duty by four percentage points to 8 per cent in February. Usually, any changes in excise duty are followed by similar changes in customs duty.
Jindal said some countries were dumping extensively in India.
The commerce ministry has recently recommended anti-dumping duties on the import of stainless steel from China, the European Union, the US, Japan, South Korea, Taiwan, South Africa and Thailand.
The recommendation follows a petition by Jindal Stainless to the directorate-general of anti-dumping and allied duties.
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Source : www.telegraphindia.com