The Confederation of Indian Industry (CII) has demanded a cut in repo
rate, saying the economy is in dire need of sentiment boosters.
CII Director General Chandrajit Banerjee said that there was a dire
need of announcing non-legislative policy measures as soon as possible
because investments had almost dried up.
Banerjee's comments surfaced after the release of data that showed that
the Index of Industrial Production (IIP) grew at a rate of merely 0.1
per cent in July.
The manufacturing growth in the month of July was recorded in the
negative at -0.2 per cent. On taking the April to July period into
account, manufacturing growth slipped even more, to -0.6 per cent. It
may be noted here that manufacturing 75.5 per cent weight in the IIP
Expressing concerns over the sluggish growth, Banerjee said, "This is
even lower than expectations. While monetary intervention in the form
of repo rate cut has been due for a while, the economy is in need of
The manufacturing sector has also been suffering weak demand from
foreign markets. The annual merchandise exports have slipped in four
out of the last five months.
Banerjee suggested that much-awaited announcements on foreign direct
investment (FDI), manufacturing policy implementation, and fiscal
consolidation would provide a great assistance.