Hope Raghuram Rajan will cut rates, improve credit flow: India Inc

Written by PTI | New Delhi | Updated: Sep 5 2013, 01:22am hrs
India Inc today said it looked forward to the new RBI Governor Raghuram Rajan initiating cut in interest rates and improving credit flow to crucial sectors like infrastructure to put economy back on high-growth path.

"We are sure that he would be able to tackle the current state of difficult times in the economy. We are sure, that as soon as the situation so allows, reversing interest rates downward along with taming inflation would be Dr Rajan's top priorities," Assocham President Rana Kapoor said.

50-year-old Rajan, who is the second youngest Governor after CD Deshmukh, moves to Mint Street after a year-long stint as the chief economic advisor in Finance Ministry.

"There is an immediate need to manage on several fronts. Reviving growth, giving an impetus to investments, arresting the downslide in the rupee value and keeping inflation under check are the areas that merit attention," Ficci Secretary General Didar Singh said.

"He (Rajan) should immediately take steps to kick-start the economy and restore investor confidence. One is to reduce interest rates and also improve the flow of credit to infrastructure sector," President of PHD Chamber of Commerce and Industry Suman Jyoti Khaitan said.

Rajan assumes charge amidst extremely difficult pressures on the external front which are resulting in the rupee getting battered and become one of the worst hit currencies globally.

"He (Rajan) is assuming office at one of the most difficult times in our recent economic history. CII is confident that as the new Governor, Dr Rajan would be able to deal with the complexities that the RBI is faced with," CII Director General Chandrajit Banerjee said.

Hailing Rajan's capabilities as an economist of international repute, he famously predicted the 2008 financial crisis, Banerjee said: "We hope that given Rajan's extensive experience and knowledge of the financial markets, we could see some innovative moves by the central bank as well as greater coordination on policy with the Government to ease the situation and bring confidence back in the economy".

Echoing similar sentiments, President of Federation of Indian Export Organisation (FIEO) M Rafeeque Ahmed said: "We are really fortunate to have a leading economist like Raghuram Rajan as the RBI Governor".

"He (Rajan) takes over at a time when the economy is in the midst of a difficult situation.

"While on one hand, the plunge in the rupee value has emerged as a critical challenge stoking fears about the already grave current account situation, on the other hand, the slowdown in GDP, IIP, Core sector growth and rising inflation continues to be a major concern".