The Chamber had been demanding reduction in interest rates with immediate effect. The 0.5 percentage point reduction in Cash Reserve Ratio from 5.5 to 5 per cent, which would release Rs. 20,000 crore bank funds, would come into effect from January 17. However, this might not ease the liquidity position because of the banks’ risk aversion. Reserve Bank of India had brought down the Repo and Reverse Repo rates and this had not translated into actual reduction in interest rates by public sector banks in the past. “It is very disappointing that there is no announcement for the benefit of the textile sector.”
The Southern India Engineering Manufacturers’ Association has said that with the reduction of Excise Duty from 8 per cent to 4 per cent for all types of water lifting pumpsets, the manufacturers in this region had reduced the prices of the end products and passed on the benefit to the customers. The government should now focus on credit facility to the industry and trade with reasonable rates. It should plan to boost the labour-intensive export sectors by introducing duty cut for consumable goods and abolishing import duty for some essential products. The focus should be on the credit needs of the industry, according to Jayakumar Ramdass, president of the association.