India Inc on Wednesday welcomed the Reserve Bank of India (RBI) decision to keep its key lending rate unchanged at 6 per cent, stating that it was "on expected lines".
In addition to the policy review, India Inc also hailed the RBI move to extend the time for repayment of loans by micro, small and medium enterprises (MSMEs) to 180 days - - providing relief to the focus sector.
The RBI kept its repo rate - - the short - term lending rate for commercial banks - - unchanged for the third time in succession at its final bi - monthly monetary policy review of the fiscal, citing upside risks for inflation from rising global crude oil prices and other domestic factors.
This is what India Inc said -
Rajnish Kumar, Chairman, State Bank of India:
"The RBI monetary policy announcement is pragmatic and balanced.
The RBI inflation outlook suggests moderation in the second half of FY2019 that will have a positive impact on bond market. "
"Apart from the status quo in rates that was widely anticipated, the forbearance allowed to MSME borrowers, broadening the definition of priority sector lending and simplification of repo directions among others are all positive steps towards a stable macro environment. "
Sandeep Jajodia, President, Assocham:
"The RBI decision is a relief for India Inc, as some of the concerns raised by the central bank, including the inflation crossing the 5 per cent threshold and uncertainty over crude prices, are quite justified.
The RBI has rightly taken note of the difficulties that arose for the MSMEs in the loan repayments following Goods and Services Tax implementation. "
Rashesh Shah, President, Ficci:
"Undoubtedly, there has been a missed opportunity of lowering interest rates significantly, which could have provided a major boost to private investment.
Going forward, we hope that the RBI will give an equal consideration to the growth concerns, especially given the fact that inflationary pressures in India are largely due to supply side factors on the agriculture front. "
Anil Khaitan, President, PHD Chamber of Commerce and Industry:
"The RBI has given adequate approach to the monetary policy in an era where a lot of developmental activities are on the move and the government thrust is to create demand in the economy.
Going ahead, we look forward to the softer stance of monetary policy as supply side reforms would go a long way to check the prices. "
Anis Chakravarty, partner and lead economist, Deloitte India:
"While the current stance is neutral, there is scope for some upward movement in policy rates if inflation increases beyond the stipulated range.
Sustained upside prints for oil prices, input costs, and global policy movements may tilt the scales in favour of monetary policy tightening in FY19. "
Umesh Revankar, MD and CEO, Shriram Transport Finance:
"In the next fiscal, there are inflationary pressures which may influence interest rate scenario but we wish lower rates to continue as Indian manufacturing is yet to take off and global growth gives us unique opportunity to encourage export based manufacturing and services. "
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