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Thursday, October 09, 2008 (15:40:27) |
| Tags : Global meltdown, CII, Assocham |
India Inc appeals for Rs 1,000 bn liquidity |
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| New Delhi: A day after the Indian government admitted that the global financial meltdown had caused liquidity problems in India, leading industry lobbies appealed to policymakers to inject Rs 1,000 billion ($22 billion) into the system to help tide over the cash crunch. In separate statements on Thursday, two apex industry lobbies, the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry (Assocham) called upon the government to take bold measures to keep India insulated from the meltdown.
"CII agreed with the finance minister in terms of the outlook toward the Indian economy, and believes that the economy had strong fundamentals. However, some proactive actions are required to keep the momentum positive," CII director general Chandrajit Banerjee said in a statement.
"These would involve deeper cuts in the cash reserve ratio (CRR) and the repo rate in order to inject liquidity into the system, creating a fund for supporting the capital markets, raising the interest rates on non-resident Indian (NRI) deposits and easing external commercial borrowing norms," he added.
In a similar statement, Assocham president Sajjan Jindal said that his chamber had sent an urgent missive to Prime Minister Manmohan Singh, urging him to immediately take bold measures. The measures include injecting Rs 1,000 billion ($22 billion) liquidity in the economy and simultaneously reducing the CRR and the repo rate by 2 percent and 3 percent respectively.
The chamber had also asked for urgent measures to stabilize the rupee, which fell to a six-year low on Wednesday, to prevent harsh casualties in Indian industry, leading to loss of thousands of jobs, the statement said. Assocham has also sought that foreign institutional investors (FIIs) be encouraged to invest in Indian corporate bonds beyond the current limit to an extent of $10 billion with lock-in of inflows for one year.
The requests from the chambers also came after Indian equities crashed during intra-day trading on Wednesday, with a key index dipping to its lowest level in two years, before staging a recovery after interventions by central banks ands governments across the globe. (IANS)
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