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India Inc urges PM to reduce cost of capital

02 Jul 2015 Evaluate

Corporate leaders of India have requested Prime Minister Narendra Modi to reduce the cost of capital, in order to encourage manufacturing and enhance the consumer demand in the country. The request was made in a meeting of PM with Confederation of Indian Industries (CII) and the Federation of Indian Chambers of Commerce and Industry (FICCI) delegations. The meeting was attended by 11 FICCI representatives including Jyotsna Suri, Naina Lal Kidwai, Rajan Bharti Mittal and Pankaj Patel and 15 CII representatives including Sumit Majumdar, Vinayak Chatterjee, Pawan Goenka, Naushad Forbes, Sanjay Reddy and Baba Kalyani.

In the meeting, the corporate leaders raised the issue that though the RBI has cut the policy rates for the third time in last six months by cumulative 75 paise, banks have passed on less than half of that to the borrowers. The industries are not able to reach the level of the capital utilization and due to this the consumer demand is becoming weak. Hence they urged PM to bring out the ways to lower the cost of capital .

Industry leaders suggested to provide support to export oriented sectors to increase the production, in order to serve the overseas market. They also pointed out that due to high credit the working capital has been affected. The Indian exporters are facing problems due to slow economic recovery. Export has declined due to the appreciation of the rupee against other currencies. In May 2015 exports declined by 20.19% at $22.3 billion in the sectors like jems and jewellery, engineering, leather and petroleum all sliding.

 

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