The central bank is set to review the benchmark policy rates this week. A decision on the same is expected on April 6.
Responding to a query on the moderating of gross domestic product (GDP) growth projections by the World Bank and the Asian Development Bank for fiscal 2023-24, Singh said that despite the lowering of growth estimates, India remains the fastest growing nation amongst the major economies. An official statement said the growth is uneven even as the global headwinds from volatile energy prices, geo-political developments and threat of recession in major economies need to be watched with abundant caution.
Commenting on the need to signal pause in repo rate hikes, Singh said, that ASSOCHAM is calling for a halt to any further rise in the interest rates, unless there is a radical change in circumstances.
“We feel the economy has reached a saturation point beyond which it may be difficult to absorb any more rate hike. Rate sensitive sectors like real estate including residential complexes, passenger cars, and commercial vehicles may see negative impact of the rate hike,” he said.
Deepak Sood, Secretary General at ASSOCHAM said that the 250-basis point increase in the policy rate since May last year, has started exerting pressure on the consumers as also corporations.
“Those wanting to diversify into India or expand their operations here should be provided all the policy support in terms of their vendor development programme, meeting their raw material requirements,” Sood said.
ASSOCHAM estimates that the Indian economy is projected to register 6.5% expansion in the FY24. The industry body said that manufacturing of several hi-tech products like electronics would require the entire value chain which may not be available completely here at this point of time. “The value addition right up to the final products should be encouraged. With this approach, the Make in India would get a big lift and the objective of a $5 trillion economy by 2025 can be realised,” the statement said.