Date:31/10/2008 URL: http://www.thehindu.com/2008/10/31/stories/2008103160150300.htm

Kerala - Kochi

Industry wants credit flow monitored

Special Correspondent

KOCHI: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) president Sajjan Jindal has said that though the RBI has constantly been reviewing the monetary development in the wake of the current downturn, it should have reduced the Repo rate by 100 basis points and brought down the cash reserve ratio (CRR) to 6 per cent. He was inaugurating the annual general meeting of Cochin Chamber of Commerce and Industry here.

Mr. Jindal suggested that the RBI should urgently create a mechanism for weekly monitoring of banks’ lending to ensure smooth extension of finances to Indian Inc.

Assocham, however, is confident that the GDP growth in the current fiscal would be close to 8 per cent and inflation would be moderated at 7 per cent by March 2009.

Agriculture is expected to grow well in 2008-09. With good monsoon, the kharif crop is good. If the rabi harvests are as good, the agricultural growth will be 7 per cent. Currently, agriculture accounts for 18 per cent of the GDP. Its contribution should be 1.3 per cent points of the GDP growth.

Slow industrial growth is causing worry especially after the release of the latest figures on the index of Industrial Production. Assocham expects an industrial growth of over 5 per cent. Currently, industry contributes 27 per cent share in the GDP. Assocham estimates that 2008-09 will close with 7.5 per cent to 8 per cent of the GDP growth rate.