Accommodative RBI stance on interest rates to help sustain recovery: ASSOCHAM

Wednesday, April 07, 2021

New Delhi, 07th April 2021:
While balancing the growth-inflation trade-off to mitigate the impact of the COVID-19 pandemic, the RBI Monetary Policy Committee’s decision to continue with the accommodative policy stance 'as long as necessary' is reassuring to the industry and trade. This decision would also get immense support from a slew of other critical measures announced by the central bank, said ASSOCHAM Secretary General, Mr Deepak Sood.
“As for inflation, we share the RBI's assessment that the recent softening of the crude oil prices can assuage the input cost pressure. What stands out in RBI's credit policy review is that despite a recent surge in coronavirus cases, the outlook for the double-digit growth for FY '22 remains intact as the economy is fast learning to live with the health challenge. The large-scale roll-out of the vaccination programme is also supporting the economy,” said Mr Sood.
He said a well-coordinated approach being followed by the RBI and the Finance Ministry to deal with the unfolding situation is yielding dividends. This is reflected in the economy holding ground despite the increase in pandemic cases. The optimism stems from a nation better prepared to deal with the challenge in terms of health infrastructure.
The ASSOCHAM Secretary General particularly noted the steps enumerated by RBI Governor Mr Shaktikanta Das to ensure domestic financial stability in the wake of volatility in the global financial markets, as was seen in the rising bond yields. The steps announced by RBI through G-SAP operations are quite innovative to bring stability in the yield curve.
The extension of forbearances with regards to NBFCs and permitting entities other than banks like payment platforms to use facilities like RTGS and NEFT would broaden the financial inclusion, which the Financial Inclusion Index would also measure.
Relaxation in the parking of ECB proceeds would provide flexibility to corporates raising resources from the global markets.
Mr Sood said RBI Governor’s assertion that the liquidity would not be tightened should come as an assurance to the financial market participants who recently saw some volatility in the face of rising US bond yields.
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. It was established by promoter Chambers, representing all regions of India. Having in its fold over 400 Chambers and Trade Associations, and serving over 4.5 lakh members across India. ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to redefine the dynamics of growth and development in the Knowledge Based Economy. More information available on
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