India Inc today welcomed the fresh stimulus measures announced by the government with focus on infrastructure funding besides cut in policy lending rates by the RBI, but exporters reeling under global meltdown found the package "disappointing". Apex chambers - FICCI and CII hailed the second stimulus package and also the cuts in the key policy interest rates of the RBI. However, Assocham said it had expected more.
Exporters, who had high expectations from the government, said they were disappointed.
"This package is timely and will help demand in the next quarter considerably. The repo and reverse repo cuts along with CRR (reduction) will ease liquidity for banks as well as have a positive effect on the cost of credit," CII Director General Chandrajit Banerjee said.
FICCI Secretary General Amit Mitra said the government and the RBI have addressed a wide range of concerns. The steps "should hopefully give a big boost to the slowing economy," Mitra said, adding that he expects "business confidence would be restored".
FICCI said it's now over to the banks' court to "come out and lend to corporates rather than invest money in government securities they have been doing earlier".
However, Assocham said the package is "in the right direction but falls short of expectations". Assocham Secretary General D S Rawat said the chamber expected a relief of Rs 1,00,000 crore.
The Federation of Indian Export Organisations (FIEO) said exporters are not happy with the steps. "We find no serious consideration (of exporters' demands) except extension of the DEPB scheme," FIEO President A Sakthivel said.
Tata Motors Managing Director Ravi Kant, while welcoming the stimulus measures said the government needs to work on ensuring that liquidity reaches customers at reasonable costs.
"Although some steps declared today would help commercial vehicles, the government needs to take many more measures to substantially stoke demand as it has gone in a reverse gear," Kant said.
Industry chamber PHDCCI said the government could "have done more" to boost the sagging growth and restore business confidence.
"The stimulus package is not bold enough to spur demand in the economy and rejuvenate business activity by creating an environment conducive to growth," PHDCCI President Satish Bagrodia said.
Federation of Indian Micro and Small and Medium Enterprises (FISME) said their is "nothing concrete" for the SME sector in the package announced by the government.
However, the measures announced by the central bank would help the sector, which has taken a beating in the backdrop of the global economic slowdown.
"The steps taken by the RBI will have far reaching impact because they will create condition wherein banks would be more inclined to lend," FISME Secretary General Anil Bhardwaj said.
Courtesy: Times Now (January 2, 2008)
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