Calling Reserve Bank of India’s (RBI’s) move not to cut key policy rates as “anticipated”, the industry, on Tuesday, said lowering of the economic growth projection by the central bank to 5.5 per cent in the current fiscal was a matter of great concern and calls for immediate actions to revive growth and boost investments.

“We understand the decision of the RBI on the rates. We draw heart from the statement of the RBI saying that had it not been for the volatility, the rates could have been reduced, since inflation has started to moderate. We see this as a softening of stance by the RBI,” Confederation of Indian Industry (CII) President Kris Gopalakrishnan said.

The industry body, however, added that the moderation of growth outlook by the RBI was a matter of great concern and that actions on multiple fronts were required to help the economy revive.

Stating that RBI’s decision to keep all key rates unchanged was on expected lines, the newly-appointed President of Associated Chambers of Commerce and Industry of India (Assocham) Rana Kapoor said, “I hope the recent steps taken by the RBI on the exchange rate front will be promptly and adequately complemented by structural and administrative measures from the government to rationalise imports and encourage exports, while intensifying efforts to attract durable foreign investment, thereby allowing the RBI to gradually roll back its recently implemented measures.”

Federation of Indian Chambers of Commerce and Industry (FICCI) Secretary-General A. Didar Singh said, “The decision of the central bank to hold back cut in the repo rate was anticipated as the entire focus at present seems centred on supporting the rupee. However, we cannot lose sight of the fact that industrial growth remains worrisome.” “Investors, it seems, have parked themselves on the fence and remain wary of undertaking fresh investments primarily due to high interest costs,” he added.

The industry said that though a slew of reform measures had been rolled out, the implementation process had to be strengthened.

Naresh Takkar, Managing Director and CEO of ICRA, said, “We welcome the RBI’s statement to gradually roll back the recent liquidity tightening measures though it could be pushed back given the heightened external sector risks. Accordingly, interest rates are likely to remain sticky and at elevated levels over the next few weeks… We anticipate the RBI to ease its stance in the second-half of the fiscal only after visible signs of stability of the foreign exchange markets and moderation of inflationary expectations.”