Kris S Gopalakrishnan, the newly-elected president of the Confederation of Indian Industry (CII), has urged the Reserve Bank of India to cut interest rates by one per cent or 100 basis points (bps) in order to boost investment.

Gopalakrishnan said that investments a cut in interest rates would automatically increase investments. He added that that kick starting investments and early implementation of Goods & Services Tax (GST) as well as Direct Tax Code (DTC) were vital for taking economic growth to 8-9 per cent in the coming years.

Speaking on the topic, he said, "The RBI needs to work in tandem with the government in boosting growth by easing interest rates by at least 100 bps in the current fiscal. Steps like early implementation of GST would help in adding 1-1.5 per cent in the GDP."

The CII President stressed that reducing interest rates was important to make cost of credit affordable while also enhancing ease of doing business. He also said that the country could not do much to improve the external factors, but certain things could definitely be done at the domestic level to boost investments and economic growth.

While industrial output slipped to 0.6 per cent in February, rate of inflation fell to 5.96 per cent in March.

The central bank will hold a meeting on May 3 to decide on its monetary policy.