M Rajkumar N Dhoot President of ASSOCHAM said that as the inflation is at its 10 month low, it is time the Reserve Bank of India took measures to ensure that the interest rates are reduced irrespective of tools it may choose to use.
Mr Dhoot said that as the RBI takes up a half quarter review of its credit policy tomorrow, it should weigh on its mind that the WPI inflation is certainly showing signs of deceleration and it is set to come further down. On the other hand, the surprise jump in the industrial growth has come about on a very low base.
In October, 2011 the industrial growth was minus 5%.
He said that "To say that 8.2% expansion in October 2012 is a great turnaround will be in self deception. The fact that the industrial production in October this year is only a shade better than what it was in 2010. We are somewhere around 2010."
He added that enough of the policy tightening has been done in the past over two years and a lot of economic growth has been sacrificed. The RBI can choose either a drastic CRR cut or reduction in the repo rate to send a strong message among the banks that the interest rates are softening.