Federation of Indian Chambers of Commerce and Industry (FICCI) on Thursday said the Reserve Bank of India’s (RBI) current monetary tightening policy was hurting country’s growth and sought reduction of interest rates.

“The RBI policy of monetary tightening is inhibiting fresh investments and hurting growth. The government and RBI need to take steps to bring down the interest rates,” FICCI President R.V. Kanoria said on the sidelines of a seminar in Guwahati.

Stating that Indian economy has potential to grow at double-digit, he said, “So why settle for an annual growth of 6-6.5 per cent. Inflation is related more to supply side bottlenecks.”

Mr. Kanoria also called upon all state governments to rally around the centre for earliest possible implementation of the Goods and Services Tax (GST).

The FICCI president said government should curtail its spending and reduce fiscal deficit, while prescribing targeted subsidies. “There is a need to revisit the subsidies. Subsidies should be targeted and reduced so that only those deserving them are able to avail of the benefits. The subsidy in diesel is going to people who can very well afford to pay for it,” he said.

He called for formulating a land acquisition law which will take care of people’s food security while allowing industry and services to acquire lands.

Regarding the depreciation in rupee, Mr. Kanoria said the RBI should concentrate on stabilising the rupee and arresting the volatility of the national currency.

In reply to a question on relations with Myanmar, Mr. Kanoria said close ties with the neighbouring country would give a boost to the economies of the north-eastern states.