Date:07/10/2008 URL: http://www.thehindubusinessline.com/2008/10/07/stories/2008100752400600.htm

Back Industry chambers hail move

Our Bureau

New Delhi, Oct. 6 Industry chambers on Monday welcomed the cut in the Cash Reserve Ratio announced by the Reserve Bank of India.

The Confederation of Indian Industry (CII) said that the move is the first step to ease the monetary tightening measures followed by RBI to control inflation. “CII is happy to note that CRR reduction announced today was one of the recommendations submitted to RBI by CII on September 30. CII said the infusion of Rs 20,000 crore through CRR cut to 8.5 per cent would help boost industry sentiment, improve liquidity and ease the strain on the money markets,” said a CII press release

Assocham hoped that the move will infuse liquidity in the market. In a statement, Assocham President, Mr Sajjan Jindal, said that it would have been better if the premier bank had also reduced the repo rate by as many basis points. The Assocham chief said that reduced CRR will help India to absorb the after effects of US financial crisis.

“The cut will begin the process of changing the mindset of Indian business towards a higher level of confidence,” the Secretary-General of the Federation of Indian Industry, Mr Amit Mitra, said.