RBI must be congratulated for bold policy stance: ASSOCHAM

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New Delhi, February 12, 2022: ASSOCHAM today hailed the Reserve Bank of India (RBI) for staying steadfast and retaining the accommodative stance and leaving the policy interest rates, REPO and Reverse REPO, unchanged.

“The RBI’s Monetary Policy Committee has correctly assessed the big macro picture, while pinpointing the challenges posed by the Covid-19 pandemic. Despite pressure to reverse the policy stance in view of the global and domestic inflation trajectory, the RBI has remained unfazed, giving growth further impetus so that the recovery in the economic activities is on course of a sustainable glidepath”, ASSOCHAM Secretary General Mr Deepak Sood said. RBI’s growth projections of 7.8 per cent for the FY’ 2022- 23 are rather conservative and may exceed the estimates.

He said the RBI must also be complimented for its smart and nimble liquidity management system. ”The RBI is trying various tools, other than increasing interest rates, to ease off the pricing pressures in the economy. It is certainly an out-of-box solution that would have no collateral impact on the growth which would continue to get the central bank’s support. This is also contrarian to what the central banks are doing in the developed countries”.

The ASSOCHAM said the continuance of measures to support the crucial health sector and the contact services industry are welcome and would further cushion them to face the ongoing pandemic-related challenges.

Extension of the On-tap liquidity facilities of R50,000 crore and Rs 15,000 crore for emergency health services and contact-intensive sectors, respectively till June, 2022 would be of great help to these sectors.

Likewise, the trade receivables discounting system (TReDS) facility for the MSMEs would ensure better liquidity for these units which bore the maximum brunt of the pandemic .  The increase in the National Automated Clearing House (NACH) system limit from Rs 1 crore to Rs 3 crore , in this regard, would be a great facilitator.

Overall, the RBI’s Monetary Policy Committee, headed by Governor Mr Shaktikanta Das has come out with a pragmatic credit policy review, the ASSOCHAM Secretary General said.