The Tamil Nadu Chamber of Commerce and Industry has welcomed the second repo rate cut by 25 basic points by the Reserve Bank of India, terming it as an act that exemplified the apex bank’s resolve to play its role in further activating the growth momentum and work in tandem with the commitment of Finance Minister Arun Jaitley towards fiscal consolidation and to bring down inflation.
In a statement, senior president S. Rethinavelu and president N. Jegatheesan were confident that the repo rate cut would motivate banks to pass on the benefit to customers by way of a corresponding reduction in lending rates. The statement said that high cost of funds was restricting the industry from competing with its counterparts in developed and developing nations, where interest rates were much lower than in India, on equal terms.
In order to effectively control inflation and leverage growth momentum, it was imperative for the government to address the constraints faced by industrial segments not only in high cost of funds but also in enhanced input and transportation costs, infrastructure inadequacies and power shortage, the chamber said.
“The government should also address the issues of infrastructure inadequacies and power shortage”
