MCCI on Second Quarter Review of Monetary Policy 2013-14

mcciCommenting on the Second Quarter Review of Monetary Policy 2013-14 announced by RBI, Shri Sanjay Agarwal, President MCCI has expressed his disappointment on the further increase in Repo Rate by 25 basis point. He feels that when industry is facing credit crunch and the banks are equally facing the liquidity problem, reduction in marginal standing facility (MSF) by 25 basis point is not enough. He suggests that CRR could be reduced by 50 basis point, coupled with 50 basis point reduction of MSF.

Shri Agarwal further says that taming inflationary spiral, particularly of food items, through a tight monetary policy has not succeeded in the last two years, as the problem is mainly structural and system-related. The economy needs a booster dose of investment and inflow of easy money into agriculture and food-related sectors, coupled with efficient management of distribution.