Welcome Guest

Businessex.Com
Home News Rate hike by RBI may severely impact MSMEs

Rate hike by RBI may severely impact MSMEs

Tags: inflation, sme, rbi, rate hike, msme, ficci

February 03, 2014 | COMMENTS ( 0 )

Rate hike by RBI may severely impact MSMEs

India Inc expressed disappointment over the Reserve Bank increasing the key rate by 0.25 per cent and hoped that banks would refrain from hiking lending rates as such a move will scuttle economic recovery.

 

"The monetary policy statement of the RBI has disappointed the industry. Growth has been anaemic and investments have been hit hard over the last two years and there are clear signs of contraction in employment opportunities across industries,"Ficci said.

 

At a time when the factory production is in the negative terrain, the industry needs policy support from all directions to get the sector back on track, the chamber said.

 

It hoped that growth and employment issues would attract greater attention in the Reserve Bank of India's (RBI) policy decisions in the coming months.

 

The Reserve Bank today raised key policy rate by 0.25 per cent to 8 per cent in a bid to curb inflation, a move that may translate into higher EMIs and push up the cost of borrowing for corporates.

 

"We hope that following this policy move banks will not hike lending rates as it would scuttle any indications of a revival visible in select segments of the economy."

 

The CII said the central bank should now focus on boosting investments and economic growth rather than containing inflation.

 

"This is an opportune time to accord precedence to growth over inflation especially as prices are trending downwards, core inflation is within the comfort zone of the RBI and inflationary expectations are not unduly high in view of a robust performance by the agriculture sector," it added.

 

Some moderation in vegetable and fruit prices eased December retail inflation to three-month low of 9.87 per cent. Wholesale inflation too has declined to a five-month low of 6.16 per cent in December.

 

The RBI should take cognizance of the faltering investment and consumption demand which is preventing the economy from realising its growth potential, CII said.

 

Expressing concern over the RBI's move, Assocham said: "We seem to have been caught in some kind of vicious cycle which is taking a huge toll on growth".

 

Exporters body Fieo too said that the hike may severely impact the MSME sector.

 

"Exports may be further impacted, particularly the MSME export sector FIEO President, M Rafeeque Ahmed said.

 

The Tirupur Exporters' Association also expressed apprehensions that the increase in the key policy rate will certainly affect the besieged export sector.

Please add your comment

Rating
Not readable? Change text.
Enter the characters as seen on the image (case insensitive)
  Notify me of followup comments via e-mail   Subscribe for daily newsletter

Other NEWS

Delhi based startup i2e1 raises $5,00,000

Delhi based startup i2e1 raises $5,...

December 10, 2015

Delhi-based i2e1, a smart network player platform which aims to provide low-cost and free internet to consumers and actionable ana....

Cab aggregators collaborate with state governments to boost entrepreneurship

Cab aggregators collaborate with st...

November 06, 2015

Ola and Uber, cab aggregators have signed agreements with Rajasthan government for skill development and creation of entrepreneuri....

Phase II of startup incubator T-Hub to be operational soon

Phase II of startup incubator T-Hub...

November 04, 2015

Telangana government is planning to expand T-Hub, its ambitious incubator programme, in its second phase with about Rs 150 crore i....

Sabse Technologies receives investment from Ratan Tata

Sabse Technologies receives investm...

November 04, 2015

Global telecom carrier, Sabse Technologies Inc, started by Hotmail Founder Sabeer Bhatia today announced that Tata Sons' Chairman ....

Mobile startup BlackNGreen seeks international expansion

Mobile startup BlackNGreen seeks in...

November 02, 2015

Buoyed by a strong demand for value added services, mobile startup BlackNGreen is eyeing revenue of Rs 350 crore in the next one y....

Startups seek better future under Hay Group's programme

Startups seek better future under H...

October 30, 2015

Global management consultancy, Hay Group will help 100 selected entrepreneurs transform their startups into successful companies o....

Quintype raises USD 3.25 million for product enhancement

Quintype raises USD 3.25 million fo...

October 27, 2015

Quintype, a data-driven publishing company raised USD 3.25 million to enhance product and business development. ....

Hospitality aggregator startup Qik Stay raises $250K

Hospitality aggregator startup Qik ...

October 27, 2015

Delhi-based Qik Stay, a hotel branding and aggregator startup, has raised $250K in seed round of funding from venture capital firm....

Milk Mantra targets a turnover of Rs 150 crore this fiscal

Milk Mantra targets a turnover of R...

October 26, 2015

Odisha-based startup dairy firm, Milk Mantra is targeting a turnover of Rs 150 crore this fiscal.....

Vista Rooms creates app on Instagram, targets tier II & III cities

Vista Rooms creates app on Instagra...

October 23, 2015

Mumbai-based online budget accommodation aggregator, Vista Rooms has created an app-like experience on Instagram where travellers ....

Jiyo Natural receives funding from Indian Angel Network

Jiyo Natural receives funding from ...

October 23, 2015

Indian Angel Network (IAN) has invested an undisclosed amount in Bengaluru-based consumer health food startup, Jiyo Natural.....

​​Vodoo raises USD 1 million from SAIF Partners

​​Vodoo raises USD 1 mi...

October 15, 2015

Deals and price comparison application, Vodoo has raised USD 1 million (around Rs 65 lakh) from SAIF Partners in a seed funding ro....

IBM launches public data centre in Chennai, partners with Nasscom to boost start ups

IBM launches public data centre in ...

October 15, 2015

Technology giant, IBM today launched public data centre in Chennai to tap into growing demand from financial services and governme....

For Nasscom, PPP will boost startups in India

For Nasscom, PPP will boost startup...

October 14, 2015

In the wake of some reservations over the central government creating startup funds, Nasscom's "10,000 startups" Vice President, R....

WalmartLabs to seek partnership with Indian startups

WalmartLabs to seek partnership wit...

October 14, 2015

WalmartLabs, the digital arm of US-based retailing major Walmart Stores, is scouting for startups in India for partnership and wor....