It was expected that the RBI would announce some more policy announcement taking into consideration the developments in the domestic markets as well as international markets, more importantly, since it is now headed by a new Governor. But it is disappointing that many of the expectations have not been met.
It is, however, heartening to note that RBI is expecting overall GDP growth of 6.5-7 per cent, which is also the view of most of the agencies tracking GDP. As far as industry is concerned, the RBIs growth prediction of 6.5 - 7 per cent for the year 2003-2004 is a good indicator for the well-being of the corporate sector, which has been reeling under low growth for past few years.
It is rather disappointing that there is no cut in the bank rate or repo rate, which was widely expected as the domestic rates on the shorter end of maturity are still much higher than international rates and it is one of the major reasons of our continuously getting inflows of foreign exchange.
The medium and small scale industries in the country are still struggling to get cheaper capital. The public sector banks are still not extending credit at lower rates and the PLR have remained unchanged at around 11-12 per cent, despite the fact that there has been a drastic reduction in the deposit rates.
One fails to understand when banks are offering only about 5-6 per cent interest on their fixed deposits, how can the PLR of these banks be in the range of 11-12 per cent.
ANIL SINGHVI, Wholetime Director, Gujarat Ambuja Cements